Congratulations, you just had a baby! The baby already takes after you and shows amazing

business acumen. You want your baby to get an undergraduate degree and work for $3$ years and

then quit their job to get a Cox MBA twenty$-$five years from now. The issue is that this is a $2-$year

program with a current annual cost of $$50,000$ and this cost is expected to grow $3\mathrm{.}5\%$ annually

over the next $25$ and $26$ years. You wish to save up for your baby$$s future MBA costs using a taxsheltered investment account expected to earn $6\mathrm{.}5\%$ compounded annually to make it easier for

the baby to quit her job and get her MBA. Please answer the following questions.

$1.$ What are the expected future costs of each year of baby$$s Cox MBA $25$ and $26$ years from

now $($assume the cost will continue to increase from year $1$ to year $2$ of the program$)?$

$2.$ How much would you have to deposit today in a single lump sum deposit in order to fund

the baby$$s future expected MBA costs $($assume your investment account will continue to

earn $6\mathrm{.}5\%$ between years $1$ and $2$ of the program$)?$

$3.$ The deposit in the previous question is a huge chunk of change. Instead, you decide it might

be best to fund your baby$$s MBA with a series of $25$ equal annual deposits beginning today.

What does this annual deposit need to be given the $6\mathrm{.}5\%$ expected annual compound

return?