SOLUTION: Suppose that you plan to need $60000 in twelve years when your child starts attending college. You want to invest to an account yeilding 5.2% interest, compounded monthly. How much
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Question 288841: Suppose that you plan to need $60000 in twelve years when your child starts attending college. You want to invest to an account yeilding 5.2% interest, compounded monthly. How much should you invest?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Suppose that you plan to need $60000 in twelve years when your child starts attending college.
You want to invest to an account yielding 5.2% interest, compounded monthly. How much should you invest?
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Equation:
A(t) = P(1+(r/n))^(nt)
----
60000 = P(1+(0.052/12))^(12*12)
---
60000 = P(1.004333)^144
---
P = 60000/1.8639
P = $32191.19
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Cheers,
Stan H.
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