Question

Peter Rabbit plans to hit the campus scene. He expects his tuition for each of the next four years to be $90000, payable at the end of each year. At a 7% annual interest rate, how much would have to be invested today to provide for all his future tuition payments? Round your answer to the nearest dollar.        

Answer 1

Period	Annuity	Present Value @7%	Present Values
1	$          90,000	0.9346	$                  84,112.15
2	$          90,000	0.8734	$                  78,609.49
3	$          90,000	0.8163	$                  73,466.81
4	$          90,000	0.7629	$                  68,660.57
		Total	$              3,04,849.01
Therefore, Amt.to be invested today is $304849.01