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The rein family needs to have 35,000 available in 18 years when their son is ready for college if they have decided to invest in a mutual fund that compounds interest continuously at 5.2%

Respuesta :

Answer:

$14053.51

Step-by-step explanation:

Since the money is to compound continuously,

Amount at Compound Interest=P(1+r)ⁿ

Amount=$35,000

r=5.2%=0.052

n=18 years

Substituting in the above formula

35000=P(1+0.052)¹⁸

35000=P(1.052)¹⁸

We divide both sides by (1.052)¹⁸ to solve for P.

P=35000÷(1.052)¹⁸

=$14053.51

The Rein Family needs to invest $14053.51 now in order to reach their goal.

abidemiokin

The amount needed to reach their goal is 87,166.85

To calculate the amount of money needed to reach their goal, we will use the formula below:

  • A = P(1+r)^t

  • P is the principal = 35000
  • r is the rate = 0.052
  • t is the time = 18

Substituting into the formula:

A = 35000()1+0.052)^18

A = 35000(1.052)^18

A = 35000(2.4905)

A = 87,166.85

Hence the amount needed to reach their goal is 87,166.85

Learn more on compound interest here: https://brainly.com/question/24924853

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