SOLUTION: Please help solve this problem. A couple plans to save for their childs' college education. What principal must be deposited when their child is born in order to have $100,000 when
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Question 560716: Please help solve this problem. A couple plans to save for their childs' college education. What principal must be deposited when their child is born in order to have $100,000 when the child turns 18? Assume the money earns 4% interst compounded quarterly.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
What principal must be deposited when their child is born in order to have $100,000 when the child turns 18? Assume the money earns 4% interst compounded quarterly.
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A(t) = P(1+(r/n))^(nt)
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100,000 = P(1+(0.04/4))^(4*18)
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100,000 = P(1.01)^(72)
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100,000 = P(2.0471)
P = $48,849.61
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Cheers,
Stan H.
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