Today, annual college expenses are running at $$30,000,$ and are expected to grow at an annual rate

of $4\%.$ Their daughter will enter college when she turns $18$ and will complete her undergraduate

study in FIVE years. Your clients expect their daughter to be responsible for $30\%$ of her college

expenses by participating in the Federal Work$-$Study Program. All annual college expenses will be

due at the beginning of each year. Your clients will tap into the $529$ Plan account to pay for their

share of their daughter$$s college expenses.

Q$4.$ Determine with precise explanation the cash flows pattern of their annual contributions to

the $529$ Plan account; and calculate and precisely explain your choice of interest rate, i$.$e$.,$

EAR$/$EPR$/$PER $($select the correct choice$),$ used in the analysis. Also, calculate the $529$

Plan account balance right before the first withdrawal to pay for their daughter$$s college

expenses.

Q$5.$ Will there be sufficient fund in the $529$ Plan account to finance their daughter$$s college

expenses? If not, when will the $529$ Plan account run out of money? Support your answer

numerically by showing the annual balances of the $529$ Plan account through their

daughter$$s college years.