1. You are working as a financial planner. A couple has asked you to put together an investment plan for the education of their daughter. She is a bright 7 year-old (her birthday is today) and everyone hopes she will go to university after high school in 10 years, on her 17^th birthday. You estimate that today the cost of a year of university is $18,500 including the cost of tuition, books, accommodation, food and clothing. You forecast that the annual inflation will be 5.8%. You may assume that these costs are incurred at the start of each university year. A typical university program lasts 4 years. The effective annual interest rate is 6.85% and is nominal. a.Suppose the couple invests money on her birthday, starting today and ending 1 year before she starts university. How much must they invest each year to have money to send their daughter to university?(Do not round intermediate calculations. Round your answer to 2dp)

INVESTMENT PER YEAR $_____________?

B. IF the couple waits 1 year, until their daughters 8^th birthday, how much more do they need to invest annually?(Do not round intermediate calculations. Round your answer to 2dp)

ADDITIONAL YEARLY PAYMENTS $ ______________?