Edward Lewis is saving for his son's college tuition. His son is currently 11 years old and will begin college in seven years. Edward has an index fund investment worth $6,070 that is earning 9.5 percent annually. Total expenses at the University of Maryland, where his son says he plans to go, currently total $12,200 per year, but are expected to grow at roughly 6 percent each year. Edward plans to invest in a mutual fund that will earn 11 percent annually to make up the difference between the college expenses and his current savings. In total, Edward will make seven equal investments with the first starting today and the last being made a year before his son begins college.

a. What will be the present value of the four years of college expenses at the time that Edwards son starts college? Assume a discount rate of 5.5 percent. Assume that the tuition payments are made at the end of each year. (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.) (Hint: Calculate PV)

b. What will be the value of the index mutual fund when his son just starts college? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.) (Hint: Calculate FV)

c, How much will Edward have to invest every year in order to have enough funds to cover all his sons expenses? (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to 2 decimal places, e.g. 15.25. Do not round factor values.) (HInt: Calculate PMT)