How much they have to invest every year to be able to meet

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Jeff's parents will like to save for their two year son to go to college. They anticipate that will cost a total of $60,000 for 4 years when Jeff turns 20.
They have spoken to their financial advisor and based on past tends have been informed that it will not be unrealistic to expect a 6% return on their investments in the long run. How much they have to invest every year to be able to meet their goal of a college fund for Jeff.
Apply the following modifications to the decision problem one at a time and solve for each case.
a. Annual college fees are $15000 per year and can be paid every three months
b. College annual fees are expected to grow in line with inflation. Long term inflation forecasts are 2% per annum.
c. Because of other commitments they are only able to put away $1500 per annum for college funds. How much longer will it take to achieve the goal.
d. It turns out that they waited and delayed their decision and now Jeff is 12 . However, they are able to put away 3000 per year instead of the $1000 dollars earlier when he was 2. What will the market return that will ensure that Jeff has the $60,000 he needs to start college.

Reference no: EM13338720

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