The Smiths are planning ahead for their daughter’s education. She’s 8 now and will start college in 10 years. How much will they need to set aside each year to have $65,000 in 10 years if the annual interest rate is 7%? Using Excel spreadsheet template. I, N, PMT, PV, FV, solve for?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 33P
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The Smiths are planning ahead for their daughter’s education. She’s 8 now and will start college in 10 years. How much will they need to set aside each year to have $65,000 in 10 years if the annual interest rate is 7%?

Using Excel spreadsheet template.

I, N, PMT, PV, FV, solve for? 

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Step 1

Future value is the estimated value of a current asset that is likely to be received at a future date, discounted at an assumed interest rate for a predetermined period of time. Investors consider the future value of a project to evaluate its value and make a decision to accept or reject it.

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