Question
You want to start saving for your childs college tuition. But you are a poor grad student / teaching assistant. Once you graduate you promise
You want to start saving for your childs college tuition. But you are a poor grad student / teaching assistant. Once you graduate you promise to start saving. If today (2022) is year 0, you will begin saving $18,000 per year, three years from now (first deposit in 2025). You will save for a total of 16 years (2040). In 2037, your child will make withdrawals from the account for a total of 4 years (2037-2040). The 2037 withdrawn amount will be $50,000 and each year the withdrawn amount will increase by 10%. Your child will let the remaining money sit in a savings account for another 30 years with a planned withdrawal at the end of 2070. Interest rates are expected to be 3% forever. How much will be in this account in 2070? Note that all deposits and withdrawals are done only in September of each year (including the final end 2070 withdrawal)!
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