You would like to contribute $50,000 towards your grandchild’s college education 15 years from now. How much money must you set aside today for this purpose if you believe you can earn 8% on your investment

To calculate how much money you need to set aside today for your grandchild's college education, we can use the concept of compound interest. Compound interest is calculated based on the initial investment (present value), the interest rate, and the time period.

In this case, you want to contribute $50,000 in 15 years, and you believe you can earn an 8% annual return. We need to find the present value of $50,000 by discounting it back to today.

To calculate the present value, we can use the formula:

Present Value = Future Value / (1 + r)^n

Where:
- Future Value is the desired amount in the future ($50,000 in this case)
- r is the interest rate per period (8% or 0.08)
- n is the number of periods (15 years)

Using this formula, let's calculate the present value:

Present Value = $50,000 / (1 + 0.08)^15

Present Value = $50,000 / (1.08)^15

Present Value ≈ $16,292.32

So, you would need to set aside approximately $16,292.32 today to have $50,000 in 15 years, assuming an 8% annual return on your investment.