Saving for College. You want to create a college fund for a child who is now 3 years old. The fund should grow to $60,000 in 15 years. If an investment available to you will yield 6 percent per year, how much must you invest in a lump sum now to realize the $60,000 when needed? (Hint: Use Appendix A.2 or visit the Garman/Forgue companion website.)

 

(A.2) where PV = FV FV PV = Present Value of the investment Future Value (1.0+ i)" i = Interest rate per period n = Number of periods the PV is invested