1. Zach wants to help pay for his kid's college. Assume he wants to pay for 75% of tuition through college. His kid will be going to college in 12 years. He will be help paying for his kid's undergraduate degree, which is expected to take him 4 years. There is a tuition growth rate of 5% and Zach has a rate of return of 7%. If the current tuition cost is $24,000 a year, how much should he save each month?
$549.06
$521.14
$556.28
$559.52
2. Rachel would like to pay for her daughter, Samantha, to go to college. Samantha will be graduating high school in 5 years and going to college. Rachel has a rate of return of 12%. Assume the that current tuition rates are $30,000 per year and there is an expected tuition growth rate of 7%. What is the lump-sum needed when Rachel begins school? Assume Rachel will pay 100% of the costs for four years and round your final answer to two decimal places.
$143,137.33
$152,498.72
$150,342.06
$157,367.39