Problem:
Blake Gray will finish high school in 7 years then wants to study a particular course at university which will take 4 years and cost $19 900 per year, paid at the start of each year. His parents want to pay for the course and they decide to start putting funds aside at a steady rate with the first payment today and continuing annually to the final year of the course. They will deposit the funds into an investment account that earns 4.49% per annum.
Required:
Question: What is the present value of the university course fees?
Question: How much money must his parents save each year starting from today?
Note: Please provide reasons to support your answer.