Problem:
Keith Stone has 10-year old daughter, Kate, who will be entering college in 8 years. Keith estimate college costs to be$20,000, $22,000, $25,000 and $28,000 payable at the beginning of each of Kate's four year in college (Kate will begin college at the beginning of year 8. He has $5,000 in his account and intends to leave it there until the beginning of the year 8.
a. How much more must Keith save each Year (assume end of the year payments) for each of the next 7 years to have enough saving to pay for his daughter? Assume Keith can earn 9% on his savings.
Explain your answer