Solution-Create a college fund for a child

Create a college fund for a child

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You want to create a college fund for a child who is now 5 years old. The fund should grow to $40,000 in 13 years. If an investment was made available to you that would yield 5% per year, how much must you invest in a lump sum NOW to realize the $40,000 when needed? (Hint: Use Appendix A.2)

Appendix A.2:

PV= FV/(1.0 +i)^n

PV= Present Value of Interest

FV= Future Value

i= interest rate per period

n= number of periods the pv is invested

Reference no: EM132376843

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Create a college fund for a child

Reference no: EM132376843

Reference no: EM132376843

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