SOLUTION: Matt and Anna have a new grandson. How much money should they invest now so that he will have $65,000 for his college education in 18 years? The money is invested at 7.05% compound
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Question 1098351: Matt and Anna have a new grandson. How much money should they invest now so that he will have $65,000 for his college education in 18 years? The money is invested at 7.05% compounded monthly. Round your answer to 2 decimal places and separate the thousands by a comma.
Answer by ankor@dixie-net.com(22740) (Show Source): You can put this solution on YOUR website!
Matt and Anna have a new grandson.
How much money should they invest now so that he will have $65,000 for his college education in 18 years?
The money is invested at 7.05% compounded monthly.
Round your answer to 2 decimal places and separate the thousands by a comma.
:
Using the formula: A = Ao(1+(r/n))^(nt), where:
A = the resulting amt after t time
Ao - initial amt
r = interest rate in decimal form
n = compounding times per year
t = time in years
:
We have to find Ao
Ao(1 + .0705/12))^(12*18) = 65000
Ao(1.005875)^216 = 65000
3.54411*Ao = 65000
Ao =
Ao = $18,340.29 needs to be invested
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