document.write( "Question 593172: If college costs $200,000 for 4 years, how much to I need to invest at my son's birth to pay for all 4 years of college using t = 18 at 4% interest. I've been given the formula A = P e ^rt. I don't understand how to calculate this and I don't undestnad what e is? Thank you. \n" ); document.write( "

Algebra.Com's Answer #376230 by scott8148(6628) $\"\"$ $\"About$

You can put this solution on YOUR website!
A is the amount after some time t ($200000 and 18 yr in your case)\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "P is the principal (initial investment that you're trying to find)\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "r is the rate of interest ___ this particular formula assumes continuous compounding\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "e is Euler's Number, the base for natural logarithms ___ there is a key for it on scientific calculators
\n" ); document.write( "___ there is a calculator in Windows ___ when you open it, click on view to select scientific\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "200000 = P e^(.04 * 18)\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "200000 / [e^(.76)] = P\r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "93533.29 = P (approx) \n" ); document.write( "

\n" );