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You figure that the total cost of college will be $ 80,000 per year 12 years...

  1. You figure that the total cost of college will be $ 80,000 per year 12 years from today. If your discount rate is 7 % compounded​ monthly, what is the present value today of four years of college costs starting 12 years from​ today?
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Answer #1
Calculation of present value today of four years of college costs starting 12 years from​ today
Year Month No. Cost of college Discount factor @ 7% compouded monthly Present Value
12 144 $80,000.00 0.43276541 $34,621.23
13 156 $80,000.00 0.40358986 $32,287.19
14 168 $80,000.00 0.37638123 $30,110.50
15 180 $80,000.00 0.35100691 $28,080.55
Present value of college cost $125,099.47
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