Question
Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for
Suppose that a young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their child's post secondary education.
Currently, tuition, books, fees, and other costs average $12,500 per year. On average, these costs have historically increased at a rate of 4% per year.
Assuming that post secondary education costs continue to increase an average of 4% per year and that all savings are invested in an account paying 7% interest, then the amount of money required to have available at age 18 to pay for all four years of undergraduate education is closest to:
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