1.the principal is $50,000, this is (p) 2. research the annual interest rate for
ID: 3104713 • Letter: 1
Question
1.the principal is $50,000, this is (p)
2. research the annual interest rate for the investment(1.15%APR), this is (r)
3.state the time in years for your investment(when the child will begin college) this is (t) (18years)
4.state the number of compounding periods per year(make it up) this is (n)
5. model the future value of grandma's investment as an exponential function with time(t) as the independent variable:f(t)=p(1+r/n)nt
6.state the future value of grandma's investment, use the internet to find the cost of a college educaton today,will her investment be able to cover the cost in today's dollars, what about in the future
Explanation / Answer
f(t)=50000*(1+(1.5/100))^(1*18)) This comes to $65 367.0318. Assuming n=1 This will take her grandchild through college for today. In future, maybe it will take the grandchild for say 2 years.
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