Use the following data to answer items #18-20:

Tuition and fees at Poultry University (PU) this year are $8,500 per year. The cost at PU is expected to increase at an annual rate of 4.5% for the foreseeable future. The rate of return on appropriate investments is 7%.

18. The Martin family has one child, presently age 12, who plans to attend PU for four years starting at age 18. What is the

present value of the expected college cost?

19. The Scott family has two children, ages 3 and 6 who will attend PU for four years each starting at age 18. What is the present

value of the expected college cost?

20. How much would the Scotts need to save annually for the next 12 years to meet this goal?