Ann and tom want to establish a fund for their grandson's college education. What lump sum deposit at a 12.7% annual interest rate compounded annually interest rate in order to have 20,000 in the fund at the end of 15 years

Question

Mathematics

Arianna Edwards

14 November, 05:37

Ann and tom want to establish a fund for their grandson's college education. What lump sum deposit at a 12.7% annual interest rate compounded annually interest rate in order to have 20,000 in the fund at the end of 15 years

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Answers (1)

Know the Answer?

Laurel Haley · Answer 1

2,683.34

Step-by-step explanation:

A=p (1+r/n) ^nt

P=A / (1+r/n) ^nt

A=20,000

r=12.7%=0.127

t=15

n=12

P=?

P=20,000 / (1+/0.127/12) ^12.7*15

=20,000 / (1+0.0106) ^190.5

=20,000 / (1.0106) ^190.5

=20,000/7.4534

P=2,683.3391

Approximately

P=2,683.34