Question

How much will I need to set per month starting today to pay for 4 years...

How much will I need to set per month starting today to pay for 4 years of college if we assume the following.

-Tuition this year is $15,000

-General inflation is 2%

-The tuition inflation rate is expected to be 4%

-I will set aside the money in a money market account which is expected to earn 5%

-College will start in 10 years

-Tuition needs for each year is paid at the beginning of each year

-We only have 10 years to save and do not continue to contribute to the account once school starts

                Pick the closest answer:

A.

$500.00
B.

$561.18
C.

$563.52
D.

$6,625.51
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Answer #1

Correct answer: B. $561.18

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -

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