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27 March, 14:08

You would like to give your daughter $75,000 towards her college education 17 years from now. how much money must you set aside today for this purpose if you can earn 8 percent on your investments?

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  1. 27 March, 14:19
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    The formula is

    A=p (1+r) ^t

    A future value 75000

    p present value?

    R interest rate 0.08

    T time 17 years

    Solve the formula for p

    P=A : (1+r) ^t

    P=75,000: (1+0.08) ^ (17)

    P=20,270.17
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