Final answer:
To have a $120,000 college fund in 17 years, you must deposit approximately $39,970.31 today into the account with an APR of 6.49% and annual compounding.
Step-by-step explanation:
To calculate how much money must be deposited today to have a $120,000 college fund in 17 years, we can use the formula for compound interest:
Future Value = Present Value × (1 + Interest Rate)^Number of Periods
Using this formula, we can substitute the given values into the equation:
$120,000 = Present Value × (1 + 0.0649)^17
To find the Present Value, we can rearrange the equation:
Present Value = $120,000 / (1 + 0.0649)^17
Calculating this using a calculator, we find that the Present Value must be approximately $39,970.31.