Goldie and Kurt want advice from your financial advising firm. They have provided the following information.

 They graduated from university four years ago and they have good jobs, but neither of them has paid much attention to their finances.

Poppy works for an accounting firm and is now making $75,000 a year in her position. Kurt works in technology, got his master degree right after college, and is making $78,000 a year. They have a total of $15,000 in their checking account at their bank.

 Goldie inherited $25,000 from her grand-mother a year ago that is sitting in her savings account that does not pay any interest.

 Goldie carries $3,000 on her credit card, which charges an APR of 23%. Kurt has a credit card that charges an APR of 25% and he carries a balance of $3,500. They pay the minimum payment each month  on their credit cards, the amount specified on the credit card statements.

 They purchased a condo 4 years ago, and have estimated they have $125,000 equity. They are considering selling their condo, and using the equity as a down payment to buy a larger home. They have qualified for one that has a purchase price of $565,000. They have pre-qualified for a 5-year term and 20 year amortization period, with a mortgage rate of 5.2% compounded semi-annually.

 

Goldie is pregnant and they would like to set aside money for their child' education. They are considering two different scenarios:

a) How much should they set aside today to have $90,000 18 years from now, assuming they can earn 7% per year compounded semiannually on their investment

b) How much should they set aside each year for the next 18 years starting now, to have $90,000 in 18 years, assuming an interest rate of 6.75% compounded quarterly?