How much would the government have to set aside now (when a child is born), to supplement the average parent’s share of a child’s college health care cost?

Part a [total : 60 marks] Use the attached answer sheet.

The government would need to set aside RM7,074.68 now in order to supplement the average parent’s share of a child’s college health care costs at the time they enter college. The amount would be compounded each year at 6% and invested to cover college health care expenses for four years.

An income stream with a negative flow rate of RM100/year for 3 years, a positiveflow of RM200 in 4th year and a positiveflow of RM300 per annum in Years 5-8 is equivalent to RM787.39.

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