You would like to accumulate enough funds to pay for four years of college education in $18$ years. Your goal is to have accumulated in an investment fund at the end of $18$ years to pay for four years of Brooklyn College Tuition. Currently the per semester tuition is $$3,465.$ You expect tuition costs to grow by $7\%$ per year.

Use the Excel future value function to figure out how much you must save each year. Assume that investments earn a $12\%$ rate of return. Assume that the starting balance in your fund $($time $0)$ is $$2,000.$

Also, your gains will be taxed in $18$ years at $25\%.$ You will only be able to allocate your after$-$tax balance to tuition.

Now your friend tells you about $529$ College Savins plans. Everything form previous question will be the same accept that you pay no taxes on your capital gains.

How does this change the amount you must save each year?