Asked by zeenat

You think that in 15 years it will cost $214,000 to provide your child with a 4-year college education. Will you have enough if you take $75,000 today and invest it for the next 15 years at 5%?
Answered by Reiny
is 75000(1.05)^ 15 more or less than 214000 ?
Answered by zeenat
it's more than 214000.
Answered by Reiny
nope,
75000(1.05)^15
= 75000(2.0789..
= 155919.61 < 214000

so it would not be enough
Answered by James
Where are you getting the 1.05 from?
Answered by James
If you just use the Table of Future Value Factors, you'll see that 5% at 15 years is 2.079. Therefore, 75,000 * 2.079 = 155,925. I am really confused as to where the 1.05 comes from...
Answered by James
nevermind... it's the same as 5%. I get it.
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