Brenda Young desires to have $32050 saved after 7 years from now for her kid\'s

Question

Brenda Young desires to have $32050 saved after 7 years from now for her kid's college fund. If she will earn 8 percent (compounded annually) on her money, what amount should she deposit now?

Use the appropriate Time Value of Money table [Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, OR Exhibit 1-D]

1-A

http://lectures.mhhe.com/connect/0073382426/Chapter%201/exhibit_1-a.jpg

1-B

http://lectures.mhhe.com/connect/0073382426/Chapter%201/exhibit_1-b.jpg

1-C

http://lectures.mhhe.com/connect/0073382426/Chapter%201/exhibit_1-c.jpg

1-D

http://lectures.mhhe.com/connect/0073382426/Chapter%201/exhibit_1-d.jpg

Explanation / Answer

current value = Future value/( 1 + rate)^n

= 32050/( 1 + .08)^7

= 18700.8671

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