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A father and mother are planning a savings program to put their daughter through junior college. Their daughter is now 9 years old. She plans

A father and mother are planning a savings program to put their daughter through junior college. Their daughter is now 9 years old. She plans to enroll at the junior college when she is 18 and it should take her 2 years to complete her education. Currently, the cost per year (for tuition, etc.) is $8,000, but a 3 percent inflation rate in these costs is forecasted. The cost for each year of college will be withdrawn when she turns 18 and 19.
The daughter received $1,000 from her grandmother at age 6 and will receive $2,000 from her aunt when she turns 18; this money, which is invested in an account paying 4.5 percent interest compounded annually, will be used to help meet the costs of the daughter's education. The rest of the costs will be met by money the parents will deposit in the account. They will make 5 equal annual deposits to the account, with the first deposit being made today on her 9th birthday and the last one being made on her 13th birthday. These deposits will also earn 4.5 percent interest compounded annually. How large must each deposit (from the parents) be in order to put the daughter through junior college? (Round cash flows to nearest dollar.)
a. $2,622
b. $2,610
c. $2,536
d. $2,412
e. $2,498
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