SOLUTION: Shaun and Rebecca have a new grandson. How much money should they invest now so that he will have $43,000 for his college education in 18 years? The money is invested at 4.95% comp

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Question 1183129: Shaun and Rebecca have a new grandson. How much money should they invest now so that he will have $43,000 for his college education in 18 years? The money is invested at 4.95% compounded semiannually.
Answer by ankor@dixie-net.com(22740) About Me  (Show Source):
You can put this solution on YOUR website!
How much money should they invest now so that he will have $43,000 for his college education in 18 years?
The money is invested at 4.95% compounded semiannually.
:
Use the compound interest formula: P%281%2B%28r%2Fn%29%29%5E%28nt%29 = A, where
A = amt after time (43000)
P = initial amt
r = rate of annual interest (decimal form) (.0495)
n = number of compound times per year (2)
t = no. of years (18)
:
P%281%2B%28.0495%2F2%29%29%5E%282%2A18%29 = 43000
P%281.02475%29%5E36 = 43000
:
2.4112674P = 43000
P = 43000%2F2.4112674
:
P = $17,832.95 invested for 18 yrs to get $43,000