SOLUTION: When Dennis turns 18, his parents will give him money tgat they invested for him when he was born. They invested the money in a savings account that had a interest rate of 7.2%
Question 1122961: When Dennis turns 18, his parents will give him money tgat they invested for him when he was born. They invested the money in a savings account that had a interest rate of 7.2% compounded monthly. If they will give him$91001.31, how much did they initially invest? Answer by Theo(13342) (Show Source):
the calculator tells me that the money invested was $24,996.77.
i provided the calculator with the following inputs.
present value = 0
future value = 91001.31
number of time periods = 18 * 12 = 216 months
payment each time period = 0
interest rate % per time period = 7.2/12 = .6% each month.
payment each time period is made at the end of each time period (not required since there was no payment made om each time period).
i also use the texas instruments BA-II financnial calculator and it told me the same thing.
it looks very much like the initial investment was $25,000, but that would have led to a future value of 91,013.09, a very slight difference than the amount you showed.
