Create a college savings plan

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Reference no: EM13875969

Create a college savings plan for your 3 year-old son. Assume that he will begin college in 15 years. You plan to pay for 4 years of college at $17,000 per year (tuition is due at the beginning of each year). You estimate earning 4% per year (inflation-adjusted) in the years prior to college, and then you will put the savings into safer investments earning just 1% in the years that he is in college.

What will it take to fund it via a lump sum today? Round to two decimals.

What will it take to fund it via equal regular monthly payments at the end of each month (instead of a lump sum)?

What would your monthly payments be (at the end of each month) if you start the account with $1,000 already saved?

Reference no: EM13875969

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