It is September 1, 2010 and Richard Spender has a problem... HE SPENDS TOO MUCH! Richard has managed to rack up some impressive debts over the past few years; however, he has another problem. He has four kids: a 14 year old son, a 13 year old daughter, and twins (a boy and a girl) aged 11 who will all be going to university. Each child will begin university in September of the year they turn 18 (so for his 14 year old son, there are exactly 4 years to go, for his 13 year old daughter there are 5 years to go, and for his twins there are 7 years to go. Each child will require $5644.00 per year for four years, for tuition payments payable each September. Richard would like to set up a savings plan to cover this expense. As his Financial Advisor, you can offer him an interest rate of 3% compounded monthly for a college savings plan. However, Richard must take care of his other debts as well

Type of Debt Outstanding principal Credit card 1 $4,400 Credit card 2 $4,800 Credit card 3 $1,700 Credit card 4 $14,720 Line of Credit $32,000 Car Loan $44,000 Mortgage $349,000 1. How much must richard save each month in the college savings plan? 2. How much must he pay each month towards his debts? I'd like to understand the rational and equation/calculations used to solve this problem. Thanks in advance