Question: #1) Financing your child’s education.

You plan to invest part of your paycheck to finance your children’s education. You want enough money in the account to be able to draw $1000 a month, every month for 8 years beginning 20 years from now. The account pays 0.5% interest every month.

A. How much money will you need 20 years from now to finance one child’s education? Assume you stop investing when the first child begins college (a safe assumption!).

B. How much must you deposit each month over the next 20 years?