Question

mr. and mrs. sanchez hope to send their son to college in thirteen years. how much money should they invest now at an interest rate of per year, compounded continuously, in order to be able to contribute to his education?

Answer 1

Mr. and Mrs. Salim should invest $2666 for fourteen years to contribute $9500 to her education.

The formula gives interest:

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

Where A is the final quantity, r is the rate, t is the amount, P is the principal, and n is the variety of times combined in an exceedingly amount.

Given that A = 9500, r = 9.5% = 0.095, t = 14, n = 1. hence:

A=P(1+R/N)^nt

9500=P(1+0.095)^14

9500=3.56P

P=$2666

Mr. and Mrs. Salim should invest $2666 for fourteen years to contribute $9500 to her education.

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