Homework Answers
Rate of interest=4% now first child is after 4 years so first payout after 4+18=22 years, second payout=22+3(3 years apart each child)=25 years, third payout =25+3=28 years
Present value of future outflows at 4% interest rate=60000/1.04^22+60000/1.04^25+60000/1.04^28=$67,833 Hence one should invest $67,833 now for the estimated withdrawl for each child
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