Question 280019
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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.



<pre>
Use the formula of the future value of a discretely compounded account

    150000 = {{{P*(1+0.05/4)^(4*15)}}}.


where P is the unknown deposited value.


From this formula

    P = {{{150000/(1+0.05/4)^60}}} = 71185.14 dollars.


<U>ANSWER</U>.  $71,185.14 should be deposited today.
</pre>

Solved correctly.