The average cost of a 4 year college education is projected to be $130,000 in 19 years. How much money should be invested now at 8.5%, compounded quarterly?

Question

How do I figure out the steps?

Answer 1

A(t) = A(0)(1+0.085/4)^4t is the governing mathematical rule.

 

If t=19 & A(19) = 130,000 you can find A(0) which is the investment needed today to yield 130K in 19 years.