Answered

Discover the answers you need at Westonci.ca, a dynamic Q&A platform where knowledge is shared freely by a community of experts. Get detailed and accurate answers to your questions from a community of experts on our comprehensive Q&A platform. Discover detailed answers to your questions from a wide network of experts on our comprehensive Q&A platform.

Saving for College. You want to create a college fund for a child who is now 3 years old. The fund should grow to $60,000 in 15 years. If an investment available to you will yield 6% per year, how much must you invest in a lump sum now to realize the $60,000 when needed? (Hint: Use Appendix A.2.)

Sagot :

Answer:

present value  = $25035.90

Explanation:

given data

future value = $60,000

rate = 6% = 0.06

time period = 15 year

solution

we get here present value that is express as

present value = [tex]\frac{future \ value}{(1+rate)^{time}}[/tex]     ........................1

put here value

present value = [tex]\frac{60000}{(1+0.06)^{15}}[/tex]  

solve it and we get

present value  = $25035.90

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.