Melissa Gould wants to invest today to assure adequate funds for her son's college education.
She estimates that her son will need $20,000 at the end of eighteen years, $25,000 at the end of nineteen years, $30,000 at the end of twenty years, and $40,000 at the end of twenty-one years.
How much does Melissa have to invest in a fund today if the fund earns the following interest rate?
a. 6 percent per year with annual compounding
b. 6 percent per year with quarterly compounding
c. 6 percent per year with monthly compounding