Question

A newborn child receives a $20,000 gift toward college education from her grandparents. How much will the 20,000 be worth in 17 years if it is invested at 7% and compounded quarterly?

Answer 1

Answer:

The amount the $20.000 will be worth in 17  years at compound interest is $65068.443

Step-by-step explanation:

Here we have the Principal, P = $20,000.00

The annual interest rate, r = 7% = 0.07

Time , t = 17 years

Number of compounding period per year, m = quarterly = 4

The compound interest can be found from the following formula;

$Amount, \ A = P \left (1 + \frac{1}{r} \right )^{mt}$

Therefore, by plugging the values of the equation parameters, we have;

$Amount, \ A = 20000 \left (1 + \frac{0.07}{4} \right )^{4 \times 17} = \ 65068.443$

Therefore, the amount the $20.000 will be worth in 17  years at compound interest = $65068.443.

Answer 2

So, the amount of $20,000 be worth in 17 years if it is invested at 7% and compounded quarterly is $65068.443 and this can be determined by using the compound interest formula.

Given :

A newborn child receives a $20,000 gift toward college education from her grandparents.

The formula of compound interest is given by:

$\rm A= P(1+\dfrac{r}{n})^{nt}$

where A is the final amount, P is the principal amount, r is the interest rate, n is the number of times interest applied per time period and t is the number of periods elapsed.

Substitute the known terms in the above formula:

$\rm A = 20000(1+\dfrac{0.07}{4})^{4\times 17}$

$\rm A = 20000(1.0175)^{68}$

A = $65068.443

So, the amount of $20,000 be worth in 17 years if it is invested at 7% and compounded quarterly is $65068.443.

For more information, refer to the link given below:

https://brainly.com/question/22803385