Melissa Gould wants to invest today in order to assure adequate funds for her son’s college education. She estimates that her son will need $20,000 at the end of 18 years; $25,000 at the end of 19 years; $30,000 at the end of 20 years; and $40,000 at the end of 21 years. How much will Melissa have to invest in a fund today if the fund earns the following interest rate?
a. 6 percent per year with annual compounding
b. 6 percent per year with quarterly compounding
c. 6 percent per year with monthly compounding