document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=434253>Question 434253</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Natasha recently had a baby girl and wants to place her baby shower money into an account that earns 8% enterest monthly. She needs $80,000 in this account to pay for her daughters college in 18 years. How much money would she need to put into this account now, in order to have that $80,000 in 18 years? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #301042 by </B><A HREF=/tutors/aboutme.mpl?userid=htmentor><B>htmentor(1343)</B></A><img src=\"/images/stars/stars-12.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=htmentor><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=htmentor><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=301042\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Surely you must mean 8% interest ANNUALLY, not MONTHLY!  <BR>\n" );
document.write( "Assuming it's 8% interest compounded annually, we can write the following formula:<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=P+=+P0%281%2Br%29%5En ALIGN=MIDDLE  ALT=\"P+=+P0%281%2Br%29%5En\"   DISABLED_style= \"max-width:90%; height:auto;\" > <BR>\n" );
document.write( "where P0 is the inital principal, P is the present value, r is the annual interest rate, and n is the period in years.<BR>\n" );
document.write( "In this problem, P = 80000, r = 0.08, and n = 18<BR>\n" );
document.write( "So we can write <IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=80000+=+P0%281%2B0.08%29%5E18%29 ALIGN=MIDDLE  ALT=\"80000+=+P0%281%2B0.08%29%5E18%29\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "Solve for P0:<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=80000%2F%281%2B0.08%29%5E18+=+P0+=+20020 ALIGN=MIDDLE  ALT=\"80000%2F%281%2B0.08%29%5E18+=+P0+=+20020\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "So the initial investment was $20020<BR>\n" );
document.write( "---------------------------------------------<BR>\n" );
document.write( "If the 8% annual interest is compounded monthly, then the rate would be r=0.08/12 and n=18*12<BR>\n" );
document.write( "In that case, the initial investment would be:<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=80000%2F%281%2B.08%2F12%29%5E216 ALIGN=MIDDLE  ALT=\"80000%2F%281%2B.08%2F12%29%5E216\"   DISABLED_style= \"max-width:90%; height:auto;\" > = $19045<BR>\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );