MrsBrown Is Considering Setting Up a College Fund for Her

Essay

Mrs.Brown is considering setting up a college fund for her grandson.Mrs.Brown wants to pay her grandson's tuition fees of $5,000 each year for four years.Assume that she saves an equal amount each year, and the first deposit is made one year from now.Interest rates will remain constant at 8 percent.How much must Mrs.Brown save each year? Assume her grandson will go to college in 18 years and tuition fees are paid once a year at the beginning of the year.