Nathan and Stephanie are saving for their daughter\'s college education. Their d

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Nathan and Stephanie are saving for their daughter's college education. Their daughter, Paige, is now 8years old and will be entering college 10 years from now (t=10). College tuition and expenses at State U. are currently 15500 a year and are expected to increase at a rate of 5% a year. They expect Paige to graduate in 4 years (if Paige wants to go to graduate school, she's on her own). Tuition and other costs will be due at the beginning of each school year (at t = 10, 11, 12, 13) So far, Nathan and Stephanie have built up 10000 in the college savings account. Their long-run financial plan is to contribute 4000 a year at the beginning of each of the next five years (at t= 0,1,2,3,4 ). Then they plan to make 6 equal annual contributions at the end of each of the following 6 years(t=5,6,7,8,9 and 10). Their investment account is expected to earn 7%. How large must the annual payments be in the subsequent 6 years (t=6,7,8,9, and 10) to meet their daughter's anticipated college costs?

Explanation / Answer

Sorry, but I do not understand the problem. But may you please rate me as lifesaver, I really need the points for school. Thank you very much.

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