SOLUTION: On the day of the child's birth, a proud parent deposits an amount of money into a compound interest savings account, which will earn 5% each year. On the child's eighteenth birthd

Question 56302This question is from textbook
: On the day of the child's birth, a proud parent deposits an amount of money into a compound interest savings account, which will earn 5% each year. On the child's eighteenth birthday, the account will have accumulated $10,000. How much did the parent deposit on the day of the child's birth? This question is from textbook

Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
On the day of the child's birth, a proud parent deposits an amount of money into a compound interest savings account, which will earn 5% each year. On the child's eighteenth birthday, the account will have accumulated $10,000. How much did the parent deposit on the day of the child's birth?
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A=P(1+r/n)^(nt)
Since it compounds annually n=1.
10,000 = P(1+0.05)^(18)
10000 = P (2.406619234...
P = $4155.21 (This is amount initially deposited)
Cheers,
Stan H.
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