Lets assume that youre preparing for your (future) child (or grandchild)s college education. 20 years later from now, your (future) child will go to college. Currently, youre considering two colleges for your (future) child (or grandchild)

University 1 Harvard University

University 2 Vanderbilt University

1. Please visit the website of each university and find tuition and related information. Use out-of-state tuition information. Make sure that you include accurate information and citation source (20 points).

2. Using the tuition and related information in (1), you need to compound it at a reasonable "inflation" rate for education-related expenses for x number of years. I hope most of you are aware that educational inflation has been much higher than overall inflation in the economy, (You can find tuition inflation statistics from the internet. Use google.com and search for tuition inflation or education inflation) (20 points).

3. After you calculate this projected cost, your next job is to find the annual deposit needed to accomplish the goal - meeting the educational expenses. You must assume the investment rate of return (You can use savings account rate as your investment rate of return, for example). Recall the equations or time value of the money table we went over in class. You will choose the one that will give you the amount of the annual deposit (20 points).

4. What if you have $10,000 right now? How does this new information affect the previous answer in (3)? Whats new annual deposit amount you should make? (20 points)

5. Lets assume that you just won the lottery. Rather than making equal annual payments, you decided to make one lump-sum deposit today to cover your childs future college expense needs. There will be no additional deposit. How much should you make one lump-sum deposit today to accumulate projected college education expense you need in 20 years? (20 points)