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How do you calculate using TVM solver?
23. Bills planning for his daughters college education to being in 7 years. He estimates the costs to be $15,000 per year for her 4 year degree. He also feels he can earn 7% on any money he invests over the next 7 years and during the 4 college years. How much must Bill deposit today for his daughter to be able to withdraw $15,000 at the beginning of each of her 4 years of college? A. $30,912 B. $33,856 C. $35,669 D. $37,426
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Answer #1

First we calculate the Present value of withdrawals at the end of year 7 or beginning of collecge education

Set BGN mode

FV=0

I/Y=7%

PMT=15000

N=4

CPT PV=54364.74

Now, we calculate the deposit required

FV=54364.74

I/Y=7%

N=7

PMT=0

CPT PV=33856

Option B

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