You would like to give your daughter $50,000 towards her college education sixteen years from now. How much money must you set aside today for this purpose if you can earn 7.8% on your funds?
A) $14,775.50
B) $15,033.84
C) $15,250.00
D) $16,245.33
E) $16,909.13

Question

Quizplus · Accepted Answer

To find the present value, use the formula for present value: PV = FV / (1 + r)^n, where FV is the future value ($50,000), r is the interest rate (7.8% or 0.078), and n is the number of years (16). Calculating this gives approximately $15,033.84.

You Would Like to Give Your Daughter $50,000 Towards Her