Q1. What is the present value of the cost of college education for 4 children ages 1,3,5, and 7. The current cost of college is $25,000. The children will begin college at age 18 and be in college for 4 years. Education inflation is expected to be 6% and the parents portfolio rate of return is 8%.
Q2. Using the previous information, how much do the parents need to save annually at year end through the education of the youngest child at pay all college costs.
Can you provide please provide the calculations to solve questions 1 and 2. I want to know the process of how each step resulted in the final answer.