How much money must your uncle give you now to finance 4 years of college, assuming an annual cost of $48,000 & an interest rate of 6% (applied to the principal until disbursed)?

Question

I know the answer to this is $166,325.07, How do I get this answer? What formula do I use? I know it is present value of annuity but how do I get this formula

Answer 1

The Annuity Formula

PV=PMT*ß(i,T) where ß is the payment multiplier,

ß =(1/i)(1-(1/(1+i))^T) = (1/6%)(1-(1/(1.06))⁴) =3.4651

so depositing 3.4651*48,000 will give you enough to pay fro school

=166,325.069