Reference no: EM131836230

A client plans to send a child to college for 4 years starting 18 years from now. Having set aside money for tuition, she decides to plan for room and board also. She estimates these costs at $20,000 per year, payable at the beginning of each year, by the time her child goes to college. If she starts next year and makes 17 payments into a savings account paying 5 percent annually, annual payments of $2744.50 would raise the needed funds. Five years later, the client has made all five payments as required. At the end of year five, she receives a $10,000 inheritance which she applies to the college fund. How much will her new payments beginning in year 6, be to realize her goals.