This assignment is directly related to the time value of money you learned in chapters 4 & 5. Answer the following question:

Let's assume that you're preparing for your (future) child (or grandchild)'s college education. 20 years later from now, your (future) child will go to college. Currently you're considering two colleges for your (future) child (or grandchild). Choose two universities of your interest. Estimate future costs of two colleges for your (future) child (or grandchild) and calculate needed annual savings for two colleges. Please specify your assumptions for computation of future costs and needed annual savings.

1. Please visit website of each university and find tuition and related information. Use out-of-state tuition information.Make sure that you include accurate information and citation source (20 points).
2. Using the tuition and related information in (1), you need to compound it at a reasonable "inflation" rate for education-related expenses for x number of years. I hope most of you are aware that educational inflation has been much higher than overall inflation in the economy, (You can find 'tuition inflation' statistics from the internet. Use google.com and search for tuition inflation or education inflation) (40 points).
3. After you calculate this projected cost, your next job is to find the annual deposit needed to accomplish the goal - meeting the educational expenses. You assume the investment rate of return (You can use 'savings account rate as your investment rate of return, for example). Recall the equations or time value of money table we went over in class. You will choose the one that will give you the amount of the annual deposit (40 points).

The schools selected are:

1. Duke University (Private): Tuition & fees $57,641; inflation rate = 4%
2. Virginia Tech (Public): Tuition & fees $33,203; inflation rate= 3.5%