medium · Certified Financial Planner Investment Planning
The Parnell household is funding college for their daughter. Current annual costs are $40,000. Education inflation is 5%. Their investment portfolio earns 8%.
If the daughter starts college in 5 years, what is the inflation-adjusted rate (i_real) to be used in the serial payment calculation?
- 13.40%
- 3.000%
- 4.762%
- 2.857%
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