You would like to give your daughter $50,000 towards her college education 9 years from now. How much money must you set aside today for this purpose if you can earn 15 percent on your investments?

To calculate how much money you must set aside today to give your daughter $50,000 in 9 years, given an annual interest rate of 15%, we can use the **Present Value (PV)** formula:

\[
PV = \frac{FV}{(1 + r)^n}
\]

Where:
- $ PV $ = Present Value (the amount you need to set aside today),
- $ FV $ = Future Value (the amount you want to have in the future, $50,000),
- $ r $ = annual interest rate (15% or 0.15),
- $ n $ = number of years (9 years).

Now, plug in the values:

\[
PV = \frac{50,000}{(1 + 0.15)^9}
\]

Let's calculate this.You must set aside approximately **$14,213.12** today in order to have $50,000 in 9 years, assuming you can earn a 15% annual return on your investment.

Would you like more details or have any questions about this?

Here are 5 related questions to expand on this:
1. How does the calculation change if the interest rate is compounded quarterly?
2. What if you plan to give the money in 5 years instead of 9?
3. How would inflation affect this savings plan?
4. How does the present value change with a different future value goal, say $100,000?
5. What would the future value be if you invest $20,000 today at the same interest rate?

**Tip**: Always check whether interest is compounded annually, quarterly, or monthly, as it can affect how much you need to save!

Discover how to calculate how much you need to set aside today to save $50,000 for your daughter's college education in 9 years with an annual 15% interest rate. Learn the present value formula and the concept of compound interest, ideal for financial planning and investment strategies.

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