What lump sum do parents need to deposit in an account earning 9%, compounded monthly, so that it will grow to $50,000 for their son's college fund in 14 years? (Round your answer to the nearest cent.)
Added by Cody P.
Step 1
The formula is: $A = P(1 + \frac{r}{n})^{nt}$ where: - $A$ is the final amount - $P$ is the initial principal (the lump sum we want to find) - $r$ is the annual interest rate (9% or 0.09 as a decimal) - $n$ is the number of times interest is compounded per year Show more…
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