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This problem says lily is planning to invest in a college fund for her granddaughter.
00:04
She would like the account to grow to $40 ,000 over 15 years.
00:08
The account is estimated to earn 1 .7 % compounded monthly.
00:12
To the nearest dollar, how much will lily need to invest in the account now? and we're given the compounded formula where a of t is our result, and we want this result or the final amount to be $40 ,000.
00:24
What we don't know is the principal or the initial amount, so we'll leave that as p.
00:28
And that's multiplied times 1 plus our rate, and our rate was given as 1 .7%.
00:34
But in the formula, we need the decimal representation, which would be 0 .017.
00:39
And we'll divide by the n value, and the n value is the number of times we're compounding in a year.
00:43
So since we're compounding monthly, there's 12 months in a year, so 12 for n...