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In four years, your oldest child will be in 10th grade, at which point you and...

In four years, your oldest child will be in 10th grade, at which point you and your family plan to vacation in Europe. You estimate that you will need $25,000 for the trip. How much do you need to set aside today if you can place your money in an investment vehicle earning an average of 4.25% per year?

A. $20,998.34

B. $21,165.85

C. $20,215.55

D. $21,435.77

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Answer #1

Amount to be set aside for the trip = 25000/(1+4.25%)4 = 21165.85

Option b is correct

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