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Jane would like to start saving for the college education of newborn, Matthew, who is...

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Finance

Jane would like to start saving for the college education of newborn, Matthew, who is a month old. She decided to send Matthew to Harvard and estimate that the currently it cost $15,000 per year in todays dollar for tuition. They assume that Matthew will have 4-year college education starting at age 18. The investment rate of return for the savings plan is 8%. Education inflation is expected to be 6% annually. Calculate how much they will need save annually in order to fulfill Marks education goal.

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