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Your daughter is currently 10 years old. You anticipate that she will be going to college in 8 years. You would to have $136,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 3% per year, how much money do you need to put into the account today to ensure that you will have $136,000 in 8 years

Respuesta :

Answer:

$107,359.66

Explanation:

We are to calculate the present value of $136,000

The formula for calculating present value is :

The formula for calculating future value:

P = FV / (1 + r)^n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years

$136,000 / (1.03)^8 = $107,359.66

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