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Suppose that a young couple has just had a baby boy, and they wish to have enough saved to fund four years of college education

Suppose that a young couple has just had a baby boy, and they wish to have enough saved to fund four years of college education at a school like MIT when their son is at the ages of 19-22. Suppose this year's total expense of an undergraduate student at MIT, including tuition, room and board, books and supplies, amounts to $76,910. This annual cost is expected to grow at 3.5% a year. To simplify the timeline, they assume that all the expenses will be paid in full on their child's birthdays while he is in college, that is, his 19thto 22ndbirthdays. The annual return expected on a college savings account is 8%. How much do they need as of today in order to fund their child's college education?

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