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Suppose you plan to send your daughter to college in three years. You expect her to earn two-thirds of her tuition payment in scholarship money,

Suppose you plan to send your daughter to college in three years. You expect her to earn two-thirds of her tuition payment in scholarship money, so you estimate that your payments will be $10,000 a year for four years. To estimate whether you have set aside enough money, you ignore possible inflation in tuition payments and assume that you can earn 8 percent annually on your investments. How much should you set aside now to cover these payments?

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