Question 429189: The Cha family has decided that they need to invest some money for their daughter's college expenses. They estimate that they will need $80,000 in 16 years. If they can find an account that pays 11% interest compounded weekly, how much do they need to invest?
Answer by jorel1380(3719)   (Show Source):
You can put this solution on YOUR website! If the money is invested at 11% compounded weekly, then its' effective yield is (.11/52)^52, or 11.615% yearly. Compouding yearly, we get 11.615% yearly to the 16th power, or 480.78%. To find the starting principal we need to divide $80,000 by the principal plus 480.78% of the principal. Thus we get:
principal: $80,000/5.8078 = $13,774.58
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