SOLUTION: Please solve this word problem: How much money should parents deposit today in a college fund earning 5% compound quarterly, so that it will accumulate to $150,000.00 in 15 years?
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Question 280019: Please solve this word problem: How much money should parents deposit today in a college fund earning 5% compound quarterly, so that it will accumulate to $150,000.00 in 15 years? Found 3 solutions by mananth, ikleyn, josgarithmetic:Answer by mananth(16949) (Show Source):
You can put this solution on YOUR website! Please solve this word problem: How much money should parents deposit today in a college fund earning 5% compound quarterly, so that it will accumulate to $150,000.00 in 15 years?
a= (p+r/4)*15
150000 = (p+5/4)*15
150000/15 -5/4= p
=9998.75
You can put this solution on YOUR website! .
Please solve this word problem: How much money should parents deposit today in a college fund
earning 5% compound quarterly, so that it will accumulate to $150,000.00 in 15 years?
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The basic formula and the calculations in the post by @mananth are incorrect.
I came to bring a correct solution.
Use the formula of the future value of a discretely compounded account
150000 = .
where P is the unknown deposited value.
From this formula
P = = 71185.14 dollars.
ANSWER. $71,185.14 should be deposited today.
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