You want to start saving for your son's college education. You will need $150,000 in 10...

You want to start saving for your son's college education. You will need $150,000 in 10 years. You can earn 6% compounded annually. How much do you need to invest today to pay for the entire education?

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Expert Solution

PV = FV/(1 + r)^n

FV = 150,000

n = 10

r = 6%

PV = 150,000/(1 + 0.06)^10

PV = 150,000/1.7908476965

PV = $83,759.216539272

We need to invest $83,759.216539272 today to pay for the entire education

jeff jeffy answered 1 year ago

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