Your oldest daughter is about to start kindergarten at a private school. Tuition is $20,000 per year, payable at the beginning of the school year. You expect to keep your daughter in private school through high school. You expect tuition to increase at a rate of 6% per year over the 13 years of her schooling. What is the present value of the tuition payments if the interest rate is 6% per year? How much would you need to have in the bank now to fund all 13 years of tuition?

AppendixLO1