Problema Solution
You think that in 15 years it will cost 214,00 to provide your child with a 4 year college education. Will you have enough if you take 75,00 today and invest it for the 15 years at 4%
Answer provided by our tutors
P = $75,000 the principle or present value
r = 0.04 or 4% the annual rate
t = 15 years the number of years or the number of compounding periods
A = the future value
We need to check is A >= $214,000
A = P(1 + r)^t
A = 75000(1 + 0.04)^15
A = $135,070.76
click here to see the step by step calculation:
135,070.76 < 214,000
follows you will not have enough.