Concept explainers
Your Child’s Education You want to begin making regular deposits to finance your child’s
college education 18 years (216 months) in the future. You are able to invest $200 at the end
of each month, and you judge that $100, 000 will be needed. That is, you want the future
value F of the investment to be $100, 000. Whether you can attain that goal depends on
interest rates. If the monthaly interest rate is r as a decimal, then the future value of the
investment is given by
a. Plot the graph of F along with the target value of $100, 000. Use a horizontal span of 0 to 0.01.
b. Fina the monthly rate r that will yield the dsired future value of $100, 000. Round your answer as a percentage to one decimal place.
c. What is your total investment in your child’s education?
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