# Homework. Calculating Rate 12 Assume that total cost of collage education will be * 2,80.000 dollar when your child...

Homework. Calculating Rate 12 Assume that total cost of collage education will be * 2,80.000 dollar when your child enters collage in 18 years p you presently have \$ 45,oo to inwest, what annual tate of interest must you earn on your investment to cover the cost of your child's College education? Data: Fiv - 230.000 PV 45.000 A 18 (280.000 i = ? 45.000 i= (6,2) To - 1 2 = 1 1067 - 1 C2 = 0,067 Calculating the Number of periods. At 5 percent interest, how long does it take to double your 2 m2

1. PV =45000
FV =280000
Number of years =18
Rate=(FV/PV)^(1/n)-1 =(280000/45000)^(1/18)-1 =10.69%

2. FV =2
PV =1
FV=PV*(1+r)^n
2=1.05^n
Applying log on both sides
n=log(2)/Log(1.05)=14.21 years

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