SAVING FOR COLLEGE

Age Balance at the Deposit or interest Interest Balance at the

beginning of year withdrawal at end of end of year

year

10 0.00 0.00 0.00 0.00

11 0.00 0.00 0.00 0.00

12 0.00 0.00 0.00 0.00

13 0.00 0.00 0.00 0.00

14 0.00 0.00 0.00 0.00

15 0.00 0.00 0.00 0.00

16 0.00 0.00 0.00 0.00

17 0.00 0.00 0.00 0.00

18 0.00 -20,000.00 0.00 -20,000.00

19 -20,000.00 -20,000.00 -1,600.00 -41,600.00

20 -41,600.00 -20,000.00 -3,328.00 -64,928.00

21 -64,928.00 -20,000.00 -5,194.24 -90,122.24

SAVING FOR COLLEGE

Interest rate 8%

Linda's age today 10

Age at starting college 18

Years of college 4

Annual cost of college 20,000

PV of cost of college at 18 _________________________Q#1) What is the present value of the cost of 4-year college education at 18 ?

Annual saving __________________________________ Q#2) Given the cost of college education at 18, what is your annual saving? Please enter the number at B31.

Ending balance __________________________________Q#3) What is the ending balance at 20? Once you solve Q#2), you can see this number on the table.