Otto plans to start his son's college education ten years from today. He estimates the year-end tuition, books, and living expenses for a four-year degree will be $10,000 per year. How much does Otto need to deposit today at a 12 percent interest rate so that his son can withdraw $10,000 a year for four years of college?

Answer rating: 100% (QA)

To determine the amount Otto needs to deposit today we can use the concept of the present value of a ... View the full answer