Mutual Funds and College Tuition Bill and Colleen recently inherited $50,000. They plan

Chapter 2, Problem 33

(choose chapter or problem)

Mutual Funds and College Tuition Bill and Colleen recently inherited $50,000. They plan to invest the money in order to pay for their son Timmys tuition. They anticipate they will need an average annual return of $6000 in order to protect their capital and have enough to cover the tuition (based on the average 20102011 tuition for a 4-year public college). They will invest in four mutual funds with the following average annual returns over the 5-year period prior to December 31, 2009, rounded to the nearest whole percent: John Hancock Large Cap Equity Growth at 9%, T Rowe Price Emerging Markets at 13%, Templeton China World Fund at 14%, and TCW Small Cap Growth at 7%. (a) Write a system of equations that describes Bill and Colleens financial needs and restrictions. Be sure to name all variables. (b) Solve the system by writing its augmented matrix in reduced row echelon form. (c) Prepare a table showing various investment options. (d) What investment advice would you give to Bill and Colleen?