Sarah Jean, age 30, is looking to save money for her son's college. You beileve that social security benefits will track inflation and estimate that
Sarah Jean, age 30, is looking to save money for her son's college. You beileve that social security benefits will track inflation and estimate that inflation will be about 2.5% per year. You believe that inflation for education costs will be about 4% per year. You believe Sarah can earn about 6% on her investments inside a 529 plan (tax free savings account for college expenses). Sarah currently has $1,000 in a 529 plan.. Her sone, Ryan, is currently 2 years old and will start college at age 18. Current College tuitions is about $18,000 per year and it is expected that Ryan will be in school for 5 years. How much will Sarrah have to save each year in a 529 to fully fund Ryan's education using the above assumptions? (Round answer to nearest dollar)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started