Assuming That University Costs Continue to Increase at an Average

question 10

Essay

Assuming that university costs continue to increase at an average of 4% per year and that all her university savings are invested in an account paying 7% interest, then what is the amount of money she will need to have available at age 18 to pay for all four years of her undergraduate education?

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Definitions:

FICA Withholding

The process by which employers withhold social security and Medicare taxes from their employees' paychecks, contributing to the FICA taxes owed.

Social Security Limit

The maximum amount of earnings on which Social Security payroll taxes are levied, also affecting the amount that can be received as Social Security benefits.

AGI

Adjusted Gross Income is your gross income minus allowable deductions, used to determine your taxable income on your federal income tax return.

Estimated Taxes

Periodic advance payments of taxes on income that is not subject to withholding, such as earnings from self-employment, interest, dividends, and rental income.