Web Application Chapter 10 page 387

Katherine and Stephan Madzelonka have two children, whom they plan to send to college. Both children are currently in elementary school, but the Madzelonkas know they need to start saving for their children's college education now. A Merrill Lynch financial consultant helped the couple evaluate their college-funding needs, using the College Builder® program and other financial-planning tools.

Start at the Merrill Lynch homepage, www.merrilllynch.com, and find information about an education IRA. Point your browser to www.ipbg.ml.com/prodservs/rep_esa.html, and use the information you find to answer the following questions.

1. Who can open an Education IRA, and what amount can be contributed yearly?

2. What are three benefits of an Education IRA?

3. Suppose the Madzelonkas put $500 into an Education IRA fund at the end of each year for five years. How much will they have accumulated at the end of the fifth year if the fund earned 10% interest compounded annually? Use the "Amount of an Annuity" table on page 385 of your textbook.

Include the date of the information in your answer.

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