You have $50,000 invested in an account paying 3.50%. If you just finished paying your total college expenses for the coming year and your college costs $19,000 per year, how many years will your money last?
Treat your costs like an annuity with the first payment one year from today.) Use a financial calculator.
What will be an ideal response?
Answer: The financial calculator makes short work of this problem.
MODE = END
INPUT ? 3.50 -50,000 19,000 0
KEY N I/Y PV PMT FV
CPT 2.81
For those who like to work for their answers:
n = = = 2.81 years.
Explanation: Use a financial calculator or a spreadsheet.
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