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Posted by on Thursday, May 16, 2013 at 7:43pm.

You want to have $85,000 college fund in 15 years. HOw much will you have to deposit now under the scenario below. Assume that you make no deposits into the account after the initial deposit
An APR of 4% compounded daily.
You should invest?

  • math - , Friday, May 17, 2013 at 7:05pm

    P = Po(1+r)^n = $85,000

    r = (4%/365)/100% = 0.000109589 = Daily
    % rate expressed as a decimal and based
    on 365 days per year.

    n = 365Comp/yr. * 15yrs. = 5475 Compounding periods.

    P = Po(1.000109589)^5475 = 85000
    Po = 85000/(1.000109589)^5475 = $46650.53

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