Suppose it costs $18,000 per year (in early 2014 dollars) for tuition, room, board, and living expenses to attend a public university in the Southeastern United States. Solve, a. If inflation averages 8% per year, what is the total cost of a four-year college education starting in 2024 (i.e., 10 years later)? b. Starting in January of 2014, what monthly savings amount must be put aside to pay for this four-year college education? Assume your savings account earns 6% per year, compounded monthly (0.5% per month).

Suppose it costs $18,000 per year (in early 2014 dollars) for tuition, room, board, and living expenses to attend a public university in the Southeastern United States. Solve, a. If inflation averages 8% per year, what is the total cost of a four-year college education starting in 2024 (i.e., 10 years later)? b. Starting in January of 2014, what monthly savings amount must be put aside to pay for this four-year college education? Assume your savings account earns 6% per year, compounded monthly (0.5% per month).

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter13: Investment Fundamentals

Section: Chapter Questions

Problem 3DTM

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