Solve in Excel

Your daughter will go to a four-year college 10 years from now. You want to make sure you have four years worth of education cost 10 years from now. The current annual cost of education is $ 25,000 subject to a 5% annual rate of inflation. The investment opportunity is 10% each year (compounded monthly).

Q 8. Adjusted for the annual rate of inflation, how much do you need 10 years from now? Ignore the years of 19 and after. The correct answer is closer to:

a. $150,000

b. $160,000

c. $162,889

d. More than $163,000

e. Less than $150,000