Saturday

August 23, 2014

August 23, 2014

Posted by **CrissyXD** on Wednesday, March 28, 2012 at 2:32am.

Effie is planning to set up a trust fund for her new grand daughter. In 18 years time she wants the investment to be worth $50000 to help her buy a car or a home unit.

a)How much should she invest at 5% p.a. compounding yearly?

--I know the answer for this is $20776.03

b) How much less will she have to invest at 6% p.a., compounding monthly?

This is the question I need help with...

Does anyone know the working out and answer? thank you

- Math -
**Reiny**, Wednesday, March 28, 2012 at 8:12amlet her present investment be P

P(1.05)^18 = 50000

P = 50000/(1.05)^18 = 20776.03

for the 2nd part,

monthly rate = .06/12 = .005, but the exponent = 12x18 = 216

P = 50000/1.005^216 = 17025.53

**Related Questions**

Math - Deborah inherited a large sum of money; she wants to use a portion of ...

Stats - G. Johnson recently inherited a large sum o money; he wants to use a ...

Math - How do I formulate this question to be solved in the POM-QM software? ...

compemtary math - . To determine the compound amount of an investment of $10,...

MATH FOR LIBERAL ARTS - Maria just inherited $10,000. Her bank has a savings ...

Finite math - The manager of a money market fund has invested $4.2 million in ...

Business Math - How to determine the compound amount of an investment of $10,000...

math - To determine the compound amount of an investment of $10,000 with an ...

math - To determine the compound amount of an investment of $10,000 with an ...

contemporary math - To determine the compound amount of an investment of $10,000...