Your child is planning on attending college next year. The cost is projected at $15,000 in year 1, $16,000 in year 2, 17,000 in year 3 and finally $18,000 in year 4. The first payment will be made 1 year from today. How much should be in the education account today in order make these payments? Assume a 4% discount rate.

Refer to the problem above. If you have $55,000 saved up today, what is the internal rate of return? Hint: you are solving for the discount rate that makes $55,000 today equal to the 4 cash flows paid during years 1-4 of college.