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How much will Sarrah have to save each year

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Question - Sarah Jean, age 30, is looking to save money for her son's college. You beileve that social security benefits will track inflation and estimate that inflation will be about 2.5% per year.  You believe that inflation for education costs will be about 4% per year.  You believe Sarah can earn about 6% on her investments inside a 529 plan (tax free savings account for college expenses).  Sarah currently has $1,000 in a 529 plan. Her sone, Ryan, is currently 2 years old and will start college at age 18. Current College tuitions is about $18,000 per year and it is expected that Ryan will be in school for 5 years. How much will Sarrah have to save each year in a 529 to fully fund Ryan's education using the above assumptions?

Reference no: EM133032629

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