the cost in 15 years is 214,000 to provide a college education. Can I have enough to take $75,000 today and invest it for the next 15 years at 5%?
I thought this question looked familair
http://www.jiskha.com/display.cgi?id=1382740061
Notice the slight change in numbers, but follow the method.
Assume the Banc One receives primary deposits of $1 million. The Bank must reserves of 20 percent against its deposits. Prepare a simple balance sheet of assets and liabilities for Bang One
To determine if you will have enough to take $75,000 today and invest it for the next 15 years at a 5% interest rate, we need to calculate the future value of the investment.
To calculate the future value, we can use the compound interest formula:
\[FV = PV \times (1+r)^n\]
Where:
FV is the future value
PV is the present value (initial investment)
r is the interest rate (in decimal form)
n is the number of periods (in this case, 15 years)
In this case:
PV = $75,000
r = 5% or 0.05 (decimal form)
n = 15 years
Now we can substitute these values into the formula and calculate the future value:
\[FV = $75,000 \times (1+0.05)^{15}\]
Let's calculate the result:
\[FV = $75,000 \times (1.05)^{15}\]
Now, using a calculator, we can evaluate this expression:
\[FV = $75,000 \times 1.972941892... \approx $147,720.89\]
So, if you take $75,000 today and invest it for 15 years at a 5% interest rate, the future value will be approximately $147,720.89.
Since the cost of a college education in 15 years is $214,000, it appears that you may not have enough to cover the full cost solely with the $75,000 investment.