How much do they need to deposit today to meet their goal

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Q1. Assume the couple John and Helen want to fund a college education for their son, William, age 2. William will attend college starting at age of 18. He needs $60,000 available at age 18 for his college expense. The couple feels they can make 6% after-tax return annually in a 529 education fund. How much do they need to deposit today to meet their goal?

Q2. Assume the couple John and Helen want to fund a college education for their son, William, age 2. William will attend 4 years of college starting at age of 18. He needs $60,000 available at age 18 for his college expense.  Starting from now, the couple plans to invest $6000 to the 529 education fund at the end of each year. What rate of annual return do they need to achieve?

Reference no: EM133017671

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