In six years, your daughter will be going to college. You wish to have a fund that will provide her with $10,000 at the end of each of her four years in college. How much must you deposit today if the money will earn 10 percent in each of the 10 years?

Question

Quizplus · Accepted Answer

To find the present value of the fund, calculate the present value of each $10,000 payment at the end of each college year, then discount these values back to today using the 10% interest rate over the total 10 years.

In Six Years, Your Daughter Will Be Going to College