# Algebra

posted by .

Jason and Mary have a new baby. They want to invest \$20,000 at the baby’s birth in order to have \$100,000 for the baby’s college education. What interest rate do they need to earn in order to achieve this in 18 years?

Use the following formula to determine the average interest rate:
r = (S/P)^1/n – 1

where S = the final amount
P = the initial investment
n = number of years

• Algebra -

yes. S = P (1+r)^n

100 = 20 (1+r)^18
(1+r)^18 = 5
18 log (1+r) = log 5
using base 10 logs
18 log(1+r) = .699
log(1+r) = .0388
take antilog
1+r = 1.0935
r = .0935
times 100 = 9.35 %

• Algebra -

Thanks for the help but I still don't understand. What does log and antilog stand for?

## Similar Questions

1. ### French

Does anyone know a list of baby animals in French, or know specifically what these are?
2. ### accounting

Jesse, Inc., located in Mesa, Arizona, manufactures high-end baby chairs. The firm’s cost accountant, Lisa, has been assigned by the CEO to determine how many baby chairs Jesse, Inc., needs to make and sell in order to break even. …
3. ### microbiology

A woman brings her 6 month old son to the dr. The chief complaint is a group of lesions on the child's back. In the exam room, a toddler is leaning over playing with the baby who is giggling and appears healthy. The baby was breast …
4. ### english

1. You have to feed the baby with water sometimes. 2. You have to feed water for the baby sometimes. 3. The baby must have peed. You have to change the diaper. The diaper is wet. Will you bring a new diaper?
5. ### English

Do not watch volence TV programs. It is not good for the baby. If the baby watches good programs, he will be affected positively. Sometimes make the baby drink water. If you feed the baby with lots of milk, he will become fat. The …
6. ### FIN

Jesse, Inc., located in Mesa, Arizona, manufactures high-end baby chairs. The firm’s cost accountant, Lisa, has been assigned by the CEO to determine how many baby chairs Jesse, Inc., needs to make and sell in order to break even. …
7. ### baby care

if a breastfed baby is suffering from gas,the reason may be that the a.mother is feeding the baby to often b.baby is getting its milk to slowly c.breast milk is too rich for the baby d.baby is getting milk too quickly my answer is …
8. ### algebra

a premature baby weighs only 3 pounds, 2 ounces at birth. After 16 days in intensive care, the baby has gained 22 ounces. Measure the babys age in days and weight in ounces. Assume the baby continues to gain weight at this same rate …
9. ### College Statistics

How much should you invest each month in order to have \$800,000 if your rate of return is 5.3% compounded monthly and you want to achieve your goal in 40 years?
10. ### law

1. Mrs. Jones agreed to a surrogate motherhood arrangement in which she would give up the child at birth to Mr. and Mrs. Smith. She was inseminated with Mr. Smith's sperm, and the baby was born on May 5, 2000. The baby was turned over …

More Similar Questions

Post a New Question