document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1100356>Question 1100356</A>: <I><SPAN STYLE=\"word-break: break-all;\"> In eighteen years, you will want to help her pay for college. How much do you need to invest now at 4.75% interest compounded monthly so you can help her pay for the $40,000 expense of college? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #714842 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><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=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=714842\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> annual interest rate = 4.75% compounded monthly.<BR>\n" );
document.write( "4.75% = .0475<BR>\n" );
document.write( ".0475 / 12 = .0039583333 = monthly interest rate.<BR>\n" );
document.write( "18 years * 12 = 216 months\r<BR>\n" );
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document.write( "formula is f = p * (1 + r) ^ n\r<BR>\n" );
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document.write( "f is the future value<BR>\n" );
document.write( "p is the present value<BR>\n" );
document.write( "r is the interest rate per time period (months in this case).<BR>\n" );
document.write( "n is the number of time periods (months in this case).\r<BR>\n" );
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document.write( "in your problem.\r<BR>\n" );
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document.write( "f = 40,000<BR>\n" );
document.write( "p = what you want to find<BR>\n" );
document.write( "r = .0039583333<BR>\n" );
document.write( "n = 216\r<BR>\n" );
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document.write( "formula becomes 40,000 = p * (1 + .0039583333) ^ 216\r<BR>\n" );
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document.write( "solve for p to get p = 40,000 / ((1 + .0039583333) ^ 216)\r<BR>\n" );
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document.write( "solve for p to get p = 17,040.0625\r<BR>\n" );
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document.write( "that's how much he would have to invest today so that he can have 40,000 in 18 years if he is able to invest it at 4.75% interest compounded monthly for 18 years.\r<BR>\n" );
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document.write( "here's some more financial formulas you might find useful.\r<BR>\n" );
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