Question 1099182: A couple just had a baby. How much should they invest now at 5.1% compounded daily in order to have $35,000 for the child's education 18 years from now? Compute the answer to the nearest dollar. (Assume a 365-day year.)
Answer by jorel1380(3719)   (Show Source):
You can put this solution on YOUR website! 5.1% compounded daily=0.00013972602 per day
18 x 365= 6570 compounding periods
FV=P(1+r)^qt where FV is future value, P is the principal (or initial deposit), r is the periodic interest rate, q is the number of periods in a year, and t is the time, in years. So:
35,000= P * (1.00013972602)^6570
P=$13977 needs to be deposited initially in order to achieve the desired goal
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