Problem
Joanna and Ryan noon and just put their two boys grade 6 and two on their respective school buses for the first day of school and realized they are growing up fast. As their financial planner, Joanna Ryan called you said they wanted to save, starting today at the beginning every month for the next six years until the oldest child goes to college to pay for one and a half of school expenses for both children. You know the tuition, room, and board this year will cost $18,000 if there's elected school, and you expect 5% effective annual inflation for education expenses. Joanna Ryan also said that they know that they're children's grandparents are going to make a gift of $48,000 towards this cause in 3 years.
Assume that both children attend the same college for four years each. Also, assume that the annual tuition bill is due at the beginning of each academic year, and the first payment is actually 72 months away. How much money will Joanna and Ryan need to invest on a monthly basis to meet your education goal, assuming a required effective annual rate of 10.471%