Mrs. Clare wants to set up a college fund for her daughter so that she will have a monthly income of $500 each month for three years starting 10 years from now. How much should she deposit today if money earns 4.25% compounded monthly?

Learning Objectives

• Acquire and apply the key principles of time value of money to compute the present and future estimations of various financial instruments.
• Evaluate the requisite sum and term of financial contributions to meet targeted financial objectives, including accumulation of retirement funds, discharging loan obligations, and reserving money for educational reasons or upcoming expenses.