John and Daphne are saving for their daughter Ellen's college education. Ellen just turned 10 at...

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John and Daphne are saving for their daughter Ellen's collegeeducation. Ellen just turned 10 at (t = 0), and she will beentering college 8 years from now (at t = 8). College tuition andexpenses at State U. are currently $14,500 a year, but they areexpected to increase at a rate of 3.5% a year. Ellen shouldgraduate in 4 years--if she takes longer or wants to go to graduateschool, she will be on her own. Tuition and other costs will be dueat the beginning of each school year (at t = 8, 9, 10, and 11). Sofar, John and Daphne have accumulated $15,000 in their collegesavings account (at t = 0). Their long-run financial plan is to addan additional $5,000 in each of the next 4 years (at t = 1, 2, 3,and 4). Then they plan to make 3 equal annual contributions in eachof the following years, t = 5, 6, and 7. They expect theirinvestment account to earn 9%. How large must the annual paymentsat t = 5, 6, and 7 be to cover Ellen's anticipated college costs?

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John and Daphne are saving for their daughter Ellen's collegeeducation. Ellen just turned 10 at (t = 0), and she will beentering college 8 years from now (at t = 8). College tuition andexpenses at State U. are currently $14,500 a year, but they areexpected to increase at a rate of 3.5% a year. Ellen shouldgraduate in 4 years--if she takes longer or wants to go to graduateschool, she will be on her own. Tuition and other costs will be dueat the beginning of each school year (at t = 8, 9, 10, and 11). Sofar, John and Daphne have accumulated $15,000 in their collegesavings account (at t = 0). Their long-run financial plan is to addan additional $5,000 in each of the next 4 years (at t = 1, 2, 3,and 4). Then they plan to make 3 equal annual contributions in eachof the following years, t = 5, 6, and 7. They expect theirinvestment account to earn 9%. How large must the annual paymentsat t = 5, 6, and 7 be to cover Ellen's anticipated college costs?