Question 855111
Parents wish to have $130,000 available for a child's education.
 The child is 5 years old now.
 How much money must be set aside at 3% compounded semiannually to meet the final goal when the child is 18?
: The compound interest formula: A = p*(1+{{{r/n}}})^nt; where
A = Accumulated amt after t time
P = Initial amt
r = rate of interest in decimal form
n = number of time compounded each year
:
t = 13 yrs; Find P
P * (1 + {{{.03/2}}})^(2*13) = 130000
P * (1.015^26) = 130000
P * 1.4727 = 130000
p = {{{130000/1.4727}}}
P = $88,273.24 investment required