## Time Value Of Money (TVM)

###### Persuasive Electronic Mail
November 20, 2019
###### Identify three trends in your industry
November 20, 2019

Let’s say a year of college currently costs \$12,000 in today’s dollars. If your clients’ child is currently 8 years old and will start college at 18 years of age, how much will the first year of college cost?

Assume college expenses inflate at 3.7% per year, and you can earn an annual rate of return of 8.2% on your investments.

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Let’s say that when your clients’ child starts college, you estimate that annual tuition will be about \$14,000 in future dollars. How much in total will your clients need to have saved when their child starts college?

Assume the following:

• College expenses inflate at 3.9% per year
• Your clients can earn an annual rate of return of 5.0% on their investments while their child is in college
• Your clients want to help their child with 5 years of college
• Tuition is due in full at the beginning of each year of college

___________

In order for your clients to reach their goal, let’s say you’ve estimated that they need to have \$94,000 accumulated by the time their child starts college at age 18. To reach that goal, how much do they need to save at the end of each month if their child is currently 13 years old?

______

Assume college expenses inflate at 4.2% per year, and you can earn an annual rate of return of 6.2% on your investments.

Your clients want help figuring out how much they need to save for their child’s education. If your clients’ child is currently 3 years old and will start college at 18 years of age, how much do they need to save at the end of each month to reach their goal?

Assume the following:

• You estimate that a year of tuition in line with your clients’ goal is \$7,000 in today’s dollars
• College expenses inflate at 4.4% per year
• Your clients can earn an annual rate of return of 6.7% on their investments while their child is in college
• Your clients want to help their child with 5 years of college
• Tuition is due in full at the beginning of each year of college

___________

Your clients want help figuring out how much they need to save for their child’s education. If your clients’ child is currently 8 years old and will start college at 18 years of age, how much do they need to save at the end of each month to reach their goal?

Assume the following:

• You estimate that a year of tuition in line with your clients’ goal is \$13,000 in today’s dollars
• College expenses inflate at 3.9% per year
• Your clients can earn an annual rate of return of 7.8% on their investments while their child is in college
• Your clients want to help their child with 6 years of college
• Tuition is due in full at the beginning of each year of college

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