Use the Information for the Question(s)below

question 59

Essay

Use the information for the question(s)below.
Suppose that a young couple has just had their first baby,a daughter,and they wish to ensure that enough money will be available to pay for her college education.Currently,college tuition,books,fees,and other costs,average $12,500 per year.On average,tuition and other costs have historically increased at a rate of 4% per year.
-Assuming that college costs continue to increase an average of 4% per year and that all her college savings are invested in an account paying 7% interest,then the amount of money she will need to have available at age 18 to pay for all four years of her undergraduate education is closest to:

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Definitions:

Grace Period

A period after a due date during which a financial obligation may be met without penalty or late fees being incurred.

Credit Cards

Means of access to preapproved lines of credit granted by a bank or finance company.

Debit Cards

Bank cards that allow users to make transactions by deducting money directly from their checking account.