Beginning three months from now, you want to be able to withdraw $2,500 each qua

Question

Beginning three months from now, you want to be able to withdraw $2,500 each quarter from your bank account to cover college expenses over the next four years.

Required:
If the account pays .65 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next four years?


Please show me how to do this using a calculator.. the interest is what's tripping me up.

PMT = 2500
PV = ?
FV = 0 (I assume we are saving JUST enough)
1/Y = .65 or something else?
N = 4 (is this multiplied by 4 since it's quarterly?)

Thanks!

Explanation / Answer

N = 4*4 = 16, there are 16 quarters in 4 years I/Y = .65 PMT = 2500 FV = 0 CPT PV present value is 37,873.60

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