Question:
Your younger sister will start college in five years. She has just informed your parents that she wants to go to Harvard University, which will cost $18,000 per year for four years (cost assumed to come at the end of each year). Your parents will start saving an equal amount every year for next four years to pay for her tuition. How much should your parents start saving each year for the next four years to have the necessary funds for her education? Use 10 percent as the appropriate interest rate throughout this problem.