Calculate approximate monthly amount to invest at the beginning of the period. Round the final answer to two decimals. Please note that intermediate steps should be calculated to at least 4 decimals to get the answer correctly.
Assume the following information for your client
Step 1Child's AGE 82Years to college 18-(Step 1)3Annual College Costs (current dollars) $50,6214Assumed College Inflation rate 5.8%5College Inflation Factor. Calculate as (1+Step 4)^(Step 2) (1+Step 4)^(Step 2)6Estimate Future Annual Costs Calculate as(Step 3* Step 5) or use FV formula in Excel or financial calculator7Estimated Total Future Costs (Step 6*) years in college 4 Step 6*years in college Funding requirements 8Assumed after-tax return 8.1%9PV Factor1/(1+Step 8)^Step 210Total Lump-Sum Investment Currently RequiredStep 7*Step 9 or use PV formula in Excel or financial calculator11Amount already earmarked for education $20,24512Additional Limp-Sum funding required Step 10-Step 1113Years of funding 714PVIFA Due Move to Step 15 to use Excel or financial calculator15Annual target amount to invest(Step 12*Step 14) or use formula PMT in Excel or financial calculator16Approximate monthly amount to invest(Step 15)/12 months