## What lump sum do parents need to deposit in an account earning 9%, compounded monthly, so that it will grow to $100,000 for their son’s coll

Question

What lump sum do parents need to deposit in an account earning 9%, compounded monthly, so that it will grow to $100,000 for their son’s college fund in 13 years? (Round your answer to the nearest cent.)

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Math
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2021-12-26T10:42:18+00:00
2021-12-26T10:42:18+00:00 1 Answer
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## Answers ( )

Answer:They need to deposit $31,172.49

Step-by-step explanation:The compound interest formula is given by:Where A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per year and t is the time the money is invested or borrowed for, in years.

In this problemWe want to find P for which when

So

They need to deposit $31,172.49