Newborn Baby Gregory, Born Today, Has Doting Grandparents

Newborn baby Gregory, born today, has doting grandparents who want to start saving for his college education. They calculate that he will need $25,000 per year for 4 years beginning at age 18. In addition, they’d like to give him a lump sum of $50,000 at age 22 so he can buy a car for his graduation. They want to make 18 equal annual payments into a 10% interest-paying account (starting today and ending on Gregory’s 17th birthday) that will just cover these plans. Required: How much will he need on day one when he begins college How much will they need to invest each year?

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