Tammy and Tara want to save for their 8-year-old daughter's education. The cost today, due at the beginning of the year, is $12,000. They expect that cost to inflate at 5% per year and they plan to pay for 4 years of college. If they can earn an 8% return on their investments, how much must they save at the end of each year if they want to make their last savings payment at the beginning of their daughter's first year of college (when she is 18 years old)?
Question 78 options:
A)
$3,930
B)
$4,042
C)
$4,793
D)
$5,176