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Your clients decided to seek you financial planning assistance following the recent birth of their first child. Their goal is to accumulate sufficient educational assets
Your clients decided to seek you financial planning assistance following the recent birth of their first child. Their goal is to accumulate sufficient educational assets to fund four years of college tuition, room and board at a public university. Assuming that the cost of tuition, room and board $70,300 for their child's freshman year of college, then what is the lump sum need, given the following formation? Withdrawals at the beginning of each school year Inflation rate of college expenses = 4.2% Portfolio reinvestment rate of 6.5% (pre-start of school) Portfolio reinvestment rate of 3.5% (during school years) (Show your calculator inputs in order to receive partial credit for incorrect answer.) Your clients decided to seek you financial planning assistance following the recent birth of their first child. Their goal is to accumulate sufficient educational assets to fund four years of college tuition, room and board at a public university. Assuming that the cost of tuition, room and board $70,300 for their child's freshman year of college, then what is the lump sum need, given the following formation? Withdrawals at the beginning of each school year Inflation rate of college expenses = 4.2% Portfolio reinvestment rate of 6.5% (pre-start of school) Portfolio reinvestment rate of 3.5% (during school years) (Show your calculator inputs in order to receive partial credit for incorrect answer.)
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