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 6.5%, compounded quarterly, to provide $130,000 in 19 years

$39, 292

Explanation:

The applicable formula to calculate the present value of a projected future value is

PV =  FV  

           (1+r)n

In this case

FV = $130,000

r =6.5 % 0r  0.065

n=19

PV = 130,000

      (1 +0.065)19

PV = 130,000/3.30858

PV = $39, 292

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23