You would like to give your daughter £40,000 towards her university education thirteen years from now.How much money must you set aside today for this purpose if you can earn 6.3% on your
Funds?

Question

Quizplus · Accepted Answer

To find the present value of £40,000 needed in 13 years at an interest rate of 6.3%, use the formula for present value: PV = FV / (1 + r)^n, where FV is the future value, r is the interest rate, and n is the number of years. Plugging in the values: PV = £40,000 / (1 + 0.063)^13 = £18,077.05.

You Would Like to Give Your Daughter £40,000 Towards Her