Question 34

In about 25 years, you're going to have a kid that wants to go to college. Assume that it cost $80,000 to put a kid through college today. Assume also that college tuition will rise at exactly the rate of inflation* (an average annual rate of, say, 5% ). What will it cost you to put your kid through college?

Question 35

Refer to question 34. If you could get an average annual return of 7% on an investment, how much money would you need to deposit each year to reach your goal by the time your kid is ready to go to college?

Question 36

Refer to questions 34&35. Suppose that you could only afford to deposit $2,500 each year. What rate of return would you need to reach your goal in question 35?

Question, 37

Refer to questions 34 & 35. Suppose that you could only afford to deposit $2,360 each year. What rate of return would you need to reach your goal in question 35?