you are planning for your kids future education. he is 8 years old now and will start in ten years. How much will you have to set aside each year in order to have 65,000.00 if the interest rate is 7%.

455 $

7% of 65000 = 4500

4500 divided by 10years = 455

: )

Using the Future Amount formula

Amount = payment( (1+i)^n - 1)/i
let the payment be P
Amount = 65000
I = .07
n = 10

P( 1.07^10 - 1)/.07 = 65000
P( 1.07^10 - 1) = 4550
P = 4550/(1.07^10 - 1) = 4704.54

The amount set aside each year for 10 yrs has to be
$4704.54

To determine how much you need to set aside each year, we can use the concept of compound interest. Compound interest is calculated using the formula:

A = P(1 + r/n)^(nt)

Where:
A = the future value of the investment/loan
P = the principal amount (initial investment/loan)
r = annual interest rate (expressed as a decimal)
n = number of times that interest is compounded per year
t = number of years

In this case, you want to accumulate $65,000 in 10 years with an interest rate of 7%. We'll assume the interest is compounded annually (n = 1).

Rearranging the formula to solve for P, the principal amount (the amount to set aside each year), we get:

P = A / (1 + r/n)^(nt)

Let's plug in the values to calculate the annual savings needed:

A = $65,000
r = 0.07 (7% expressed as a decimal)
n = 1
t = 10

P = $65,000 / (1 + 0.07/1)^(1*10)

P = $65,000 / (1.07)^10

P ≈ $65,000 / 1.96715

P ≈ $33,001.02 (rounded to the nearest cent)

Therefore, you would need to set aside approximately $33,001.02 per year in order to accumulate $65,000 for your child's future education in 10 years, assuming an interest rate of 7%.