=+LG 2 LG 3 P5–46 Inflation, time value, and annual deposits Sadiq Ansari wants to support his daughter’s education by paying for her MBA degree from a premier university in Britain.

Research indicates that the fees for a 1-year MBA course at any good British university will cost £35,000 now. His daughter is 3 years old and he expects that he will need to pay her fees in 20 years. He wishes to invest a fixed amount at the end of each of the next 20 years to fund her degree. He is also aware that, on average, the fees are likely to increase by 4% annually.