. Presently college education is increasing at the rate of 7% per year. If currently college cost is running at $21,000 a year, what will the Marcottes need to have saved up for Paloma in 7 years and for Joel in 15 years. Assume that the Marcottes are in the 25% tax bracket, and 6.5% for the State taxes. Furthermore, you can assume that the Marcottes can earn 1% on their investments. You can use a financial calculator or the TVM formulas to find answers to the following: Hints in responding: remember to state your calculator keystroke or show your formula components for full credit assume all rates shown except the inflation rate, are compounded monthly. 682 o For instance, 84 months for Paloma and 180 months for Joel for time periods. o Check to make sure your interest rate is equivalent if youre using a financial calculator!)

a. How much will they have saved given their current $10,000, and assuming they presently can only save $100 per month for educational funding?

i. By the time Paloma leaves for college?

ii. By the time Joel leaves for college, assuming they do not use savings for Paloma?

iii. How much would college cost be for Palomas first year?

iv. How much would college cost be for Joels first year? v. What is Palomas college cost shortfall?

(iii. i.) vi. What is Joels college cost shortfall? (iv.-ii.)

vii. What are some saving programs and tools that the Marcottes might consider for these goals?