Financial Analysis and Personal financial planning

Question 1: The Boyles, Tom and Louise, have one child Thelma, and Louise is pregnant, about to deliver twins. Thelma just turned one year old. College tuition is currently $10,000 per year. Inflation has been about 3% per year; however college tuition is expected to increase at 6% per year. The Boyles want to establish a fund that will provide for each childs education for a period of five years. Assume that each child will go to school on their 18th birthday, that tuition will be paid at the beginning of each year, and any invested funds will earn a rate equivalent to the S&P 500 index, which is expected to increase at 10%/year.

How much do the Boyles need today to fully fund their children’s education?

Question 2: Assuming the Boyles decide instead to contribute annually at the end of the year to a college savings account to fund the childrens education, how much per year do the Boyles need to contribute, assuming that their last contribution will occur when the twins turn 18 and the funds will earn 10% annually?

The Boyles, Tom and Louise, have one child Thelma, and Louise is pregnant, about to deliver twins. Thelma just turned one year old. College tuition is currently $10,000 per year. Inflation has been about 3% per year; however college tuition is expected to increase at 6% per year. The Boyles want to establish a fund that will provide for each childs education for a period of five years. Assume that each child will go to school on their 18th birthday, that tuition will be paid at the beginning of each year, and any invested funds will earn a rate equivalent to the S&P 500 index, which is expected to increase at 10%/year.

Question 3: If each of Toms parents offer to contribute $11,000 from each of them today, per child, or a total of $66,000 (3 Children x 2 grandparents x 11,000 = $66,000) towards the childrens education, how much do the Boyles need to contribute per year at the end of the year to complete the funding of the childrens education, again assuming the last payment is made when the twins turn 18and the funds will earn 10% annually?

The Boyles, Tom and Louise, have one child Thelma, and Louise is pregnant, about to deliver twins. Thelma just turned one year old. College tuition is currently $10,000 per year. Inflation has been about 3% per year; however college tuition is expected to increase at 6% per year. The Boyles want to establish a fund that will provide for each childs education for a period of five years. Assume that each child will go to school on their 18th birthday, that tuition will be paid at the beginning of each year, and any invested funds will earn a rate equivalent to the S&P 500 index, which is expected to increase at 10%/year.

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