Let's say you deposited $180 comma 000

180,000 in a 529 plan(a tax advantaged college savingsplan) hoping to have $430 comma 000

430,000 available 10

10 years later when your first child starts college. However, youdidn't invest verywell, and 3

3 years later the account balance dropped to $160 comma 000

160,000. Let's look at what you need to do to get the college savings plan back on track.

a.What was the original annual rate of return needed to reach your goal when you started the fund 3

3 yearsago?

b. With only $160 comma 000

160,000 in the fund and 7

7 years remaining until your first child startscollege, what annual rate of return would the fund have to make to reach your $430 comma 000

430,000 goal if you add nothing to theaccount?

c.Shocked by your experience of the past 3

3 years, you feel the college fund has invested too much instocks, and you want alow-risk fund in order to ensure you have the necessary $430 comma 000

430,000 in 7

7 years. You are willing to makeend-of-the-month deposits to the fund as well. You find you can get a fund that promises to pay a guaranteed annual return of 5.5

5.5 percent which is compounded monthly. You decide to transfer the $160 comma 000

160,000 to this new fund and make the necessary monthly deposits. How large of a monthly deposit must you make into this newfund?

d.After seeing how large the monthly deposit would be(in part c of thisproblem), you decide to invest the $160 comma 000

160,000 today and $400

400 at the end of each month for the next 7

7 years into a fund consisting of 50 percent stock and 50 percent bonds and hope for the best. What APR would the fund have to earn in order to reach your $430 comma 000

430,000 goal?

a.If you invested $180 comma 000

180,000 into a fund 3

3 years ago and hoped to have $430 comma 000

430,000 available 10

10 years later when your first child startscollege, what was the original annual rate of return needed to reach your goal when you started the fund 3

3 yearsago?