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A couple with a new baby girl want to set aside money today that will cover...

A couple with a new baby girl want to set aside money today that will cover her four years of college. This will be a ONE-time contribution to a mutual fund that returns 7.00% per year on average. Currently, college tuition costs $44,300.00 for four years, but it is growing at 2.00% per year. The "baby" girl will start college in 17.00 years.

1.How much money must they set aside today to cover the cost of college?

2. What will be the cost of tuition when their "baby" girl starts college?

Answer Format: Currency: Round to: 2 decimal places.

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Answer #1

The amount required to set aside shall be such that it becomes equal to tution 1 cost after 17 years 4 Tution cost after 17 years $62,030.69 Amount to be invested now Rate of return Period $19,637.33 7% 17 $62,030.69 3 10 $62,030.69 12 13 2 Tution cost after 17 yearsThe amount required to set aside shall be such that it becomes equal to tution cost after 17 years 4 Tution cost after 17 years :44300* (1+296)^17 Amount to be invested now Rate of return Period 19637.3278768182 0.07 17 7 D6*(1+D7)AD8 10 Tution cost after 17 years 44300*(1+2%)^ 17 12 13 14 15 16 I 2

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