You Are Currently Saving for Your Child's College Education

Multiple Choice

You are currently saving for your child's college education.The current cost of college is R10,000 a year.You expect that college costs will continue to increase at a rate of 5 percent a year.Your child is scheduled to begin attending a four-year college 10 years from now .You currently have R25,000 in an account which earns 6 percent after taxes.You would like to have all of the necessary savings by the time your child enters college, and you would like to contribute a constant amount at the beginning of each of the next 10 years in order to provide the necessary amount.(You want to make 10 equal contributions starting in Year 0 and ending at Year 9.) How much should you contribute to the account each year in order to fully provide for your child's education?

A) R1,133.16
B) R1,393.42
C) R1,477.02
D) R1,507.81
E) R1,622.33