PART 3: Savings Plan for Your Children (For Their College Tuition) a) We need to figure out how much to deposit each month in an investment plan to pay for everything. I will describe one investment strategy. First, contact two or more banks, credit unions, or other financial institutions (or find the information on their website) to find the APR for a savings account. Explain which bank's savings account you would use and use the APR value for this account in the next calculations. b) You will have a child in school each year for a total of six years (with the hypothetical family). So, open one savings account for each year you will have at least one child in college. Savings Account #1 will hold the money for the first year of college expenses, when only one child will be attending college. Savings Account #2 will hold the money for the second year of college expenses, when both children will be attending college, and so on. You will have six savings accounts in all. From your chart, you will know how much you will want in savings account #1 after 15 years. Compute the monthly payment required to reach this goal. Also, from your chart, you know how much you will want in savings account #2 after 16 years. Compute the monthly payment required to reach this goal. Do this for each of the six savings accounts, then add the six different monthly payments together to find your total monthly payment. Discuss whether this will be a reasonable amount for you to invest each inonth. Finally, compute the total amount you will have invested and compare this in absolute and relative terms to the total cost of your children's educations. What does the absolute difference represent? Discuss the benefits and drawbacks of this investment plan. PART 3: Savings Plan for Your Children (For Their College Tuition) a) We need to figure out how much to deposit each month in an investment plan to pay for everything. I will describe one investment strategy. First, contact two or more banks, credit unions, or other financial institutions (or find the information on their website) to find the APR for a savings account. Explain which bank's savings account you would use and use the APR value for this account in the next calculations. b) You will have a child in school each year for a total of six years (with the hypothetical family). So, open one savings account for each year you will have at least one child in college. Savings Account #1 will hold the money for the first year of college expenses, when only one child will be attending college. Savings Account #2 will hold the money for the second year of college expenses, when both children will be attending college, and so on. You will have six savings accounts in all. From your chart, you will know how much you will want in savings account #1 after 15 years. Compute the monthly payment required to reach this goal. Also, from your chart, you know how much you will want in savings account #2 after 16 years. Compute the monthly payment required to reach this goal. Do this for each of the six savings accounts, then add the six different monthly payments together to find your total monthly payment. Discuss whether this will be a reasonable amount for you to invest each inonth. Finally, compute the total amount you will have invested and compare this in absolute and relative terms to the total cost of your children's educations. What does the absolute difference represent? Discuss the benefits and drawbacks of this investment plan
