SOLUTION: a. For their newborn child, parents deposit $10,000 in a college account that pays 8% interest, compounded annually. How much will be in the account on the child’s 17th birthday?

Question 1173371: a. For their newborn child, parents deposit $10,000 in a college account that pays 8% interest, compounded annually. How much will be in the account on the child’s 17th birthday?
b. If the parents in the previous question invested $10,000 in an account paying 8%, compounded quarterly, how much more money would they have after 17 years?

Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
this is 10000(1+.08)^17=$37,000.18
this becomes 10000(1+(.08/4))^68, divide the interest by the number of times compounded a year then raise to the total number of times compounded.
=$38,442.51
They would have $1442.33 more.
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