To solve this problem, we'll use the future value (FV) formula for compound interest:

$FV = PV \times \left( 1 + \frac{r}{n} \right)^{nt}$

Where:

• $FV$ = Future value, which is $75,000
• $PV$ = Present value (the amount to be deposited now, which we are solving for)
• $r$ = Annual interest rate as a decimal, which is 2.15% or 0.0215
• $n$ = Number of compounding periods per year (monthly compounding means $n = 12$)
• $t$ = Number of years (the difference between age 18 and 2, so $t = 16$)

Let's organize the variables based on the given financial values:

• N = total number of periods = $16 \times 12 = 192$
• FV = $75,000
• I% = 2.15%
• P/Y = 12 (payments per year, monthly)
• PV = unknown (this is what we're solving for)
• C/Y = 12 (compounding periods per year)
• PMT = 0 (no regular payments)
• PMT Type: End of the period (since it is a lump sum)

Now, let's rearrange the formula to solve for $PV$:

$PV = \frac{FV}{\left( 1 + \frac{r}{n} \right)^{nt}}$

I'll calculate this next.It seems like I can’t do more advanced data analysis right now. Please try again later.

Would you like me to guide you through the steps to calculate the present value (PV) manually? Feel free to ask for more details if needed.

Here are 5 related questions:

1. How do monthly compounding and annual compounding affect interest differently?
2. How would this calculation change if the interest rate was compounded quarterly?
3. What if the interest rate was higher or lower than 2.15%?
4. How much would you need to deposit if the goal was reached in 10 years instead of 16?
5. What is the difference between simple interest and compound interest?

Tip: When calculating with compounding interest, always check the frequency of compounding—it can significantly impact the amount you'll need to invest upfront.