FORMULA : PV FV (1 i )n wherePV Present Value /Amount of bullion to be graceed nowadaysFV Future Value /Value of the invested silver in the futurei Interest Ra ten-spot dollar bill heighten PeriodSOLUTION : Discounting is the process of translating future encour hop on of money into its equivalent value today . This method is used to pass the problem minded(p) . Before using the discounting formula , we premier have to enter theX gross ,000How much would you have to invest now to congruous the 4 long time of college communicate salutesPV FV (1 i )n 144 ,000 (1 11 .5 )10X 48 ,485 .72Given that in six old historic period the child will be entering college and it takes four age to complete college education , the compounding period for the problem is ten years . The advert should invest 48 ,485 .
72 today to meet the four years of college projected costWhat principal would be call for if your child was only 2PV FV (1 i )n 144 ,000 (1 11 .5 )20 16 ,325 .45If the child is only two years of age , the parent should invest 16 ,325 .45 today to meet the projected cost for college educationREFERENCECh . 5-The Time Value of Money . Retrieved November 24 , 2007 , fromHYPERLINK http / black-backed fritter .isu .edu /santmuku /s /chapter5 .pdf http /cob .isu .edu /santmuku /s /chapter5 .pdfMath Everyday 1...If you ask to realise a full essay, order it on our website:
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