SOLUTION: Parents wish to have $130,000 available for a child's education. The child is 5 years old now. How much money must be set aside at 3% compounded semiannually to meet the final goal
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Question 855111: Parents wish to have $130,000 available for a child's education. The child is 5 years old now. How much money must be set aside at 3% compounded semiannually to meet the final goal when the child is 18?
Answer by ankor@dixie-net.com(22740) (Show Source): You can put this solution on YOUR website!
Parents wish to have $130,000 available for a child's education.
The child is 5 years old now.
How much money must be set aside at 3% compounded semiannually to meet the final goal when the child is 18?
: The compound interest formula: A = p*(1+)^nt; where
A = Accumulated amt after t time
P = Initial amt
r = rate of interest in decimal form
n = number of time compounded each year
:
t = 13 yrs; Find P
P * (1 + )^(2*13) = 130000
P * (1.015^26) = 130000
P * 1.4727 = 130000
p =
P = $88,273.24 investment required
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