Peter and Pauline want to invest $800 each month into a college savings plan for their 7 year old son, Stan. They expect Stan to attend State University, where the tuition is $25,000 per year. Education inflation is expected to be 6.5% and the anticipated rate of return on their college savings plan is 8%. Stan will attend school for 4 years, starting at age 18. Based on these facts, will Peter and Pauline’s current investment plan with $800 monthly deposits meet their education savings goal?
A) Yes, it will exceed the goal by $111,554.49
B) No, it will fall short by $27,3224.36
C) No, it will fall short by $42,152.30
D) Yes, it will exceed the goal by $107,285.69
