Chapter 7 HW
Strategies for tax advantages include: Series EE Bonds, Roth IRAs,
Uniform Gift to Minors Act, Hope Scholarship credit, lifetime learning credit,
QTPs, Coverdell Educational Savings Account, interest on loans for school
and equity lines of credit.
Questions 4, 5, 6, 7, 12, 13, 14, 16, 17, 18, 19
4. Federal aid programs available- Federal Pell Grants, Stafford, PLUS and
Federal Perkins Loans, and Federal Supplemental Educational Opportunity
Grant. I would recommend a subsidized Stafford loan that way interest does
not accumulate while she is in school and she won’t have to start paying until
six months after she graduates. She could then use her trust fund to pay it off
as soon as possible so that she won’t have to pay a lot in interest payments. I
would not recommend borrowing against her 30,000 trust fund because she
would have interest the whole time instead of subsidizing it with the loan.
5. (3,500 x 1.07^16)+(3,500 x 1.07^17)+(3,500 x 1.07^18)+(3,500 x 1.07^19)=