Amanda Weet who is six years old has been gifted $95,000

jagguarpaw January 18, 2017 0 Comments

Question: Amanda Weet who is six years old has been gifted $…

Amanda Weet who is six years old has been gifted $95,000 (after-tax) towards a college fund. Her parents do not have the ability to add any other amounts to the fund and a good four-year college education will cost about $50,000 per year in ten years from now. What rate of return should she earn to be able to withdraw $50,000 at the end of 10th, 11th, 12th and 13th year respectively? Draw a time line,