If Susan and Joe set aside $10,000 for college tuition when their daughter is 13, how much will be available when she starts college at 18 if the account in which the money is deposited pays 12 percent compounded monthly?

A) $17,623.42
B) $18,170
C) $16,105.10
D) $16,122.26

Question

Aryveth Gutierrez · Accepted Answer

Final Answer : B, Explanation :  We need to use the formula for compound interest:A = P * (1 + (r/n))^(n*t)whereA = final amountP = principal (initial amount)r = annual interest raten = number of times interest is compounded per yeart = time (in years)Here,P = $10,000r = 12% = 0.12 (annual rate)n = 12 (compounded monthly, so 12 times a year)t = 5 years (from 13 to 18 years old)Plugging in the values:A = $10,000 * (1 + (0.12/12))^(12*5)A = $18,170.10Therefore, the answer is B.

If Susan and Joe set aside $10,000 for college tuition when their daughter is 13, how much will be available when she starts college at 18 if the account in which the money is deposited pays 12 percent compounded monthly?

A) $17,623.42
B) $18,170
C) $16,105.10
D) $16,122.26

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Learning Objectives

Related questions

If Susan and Joe set aside $10,000 for college tuition when their daughter is 13, how much will be available when she starts college at 18 if the account in which the money is deposited pays 12 percent compounded monthly?A) $17,623.42B) $18,170C) $16,105.10D) $16,122.26

Definitions

Learning Objectives

Learning Objectives

Related questions

If Susan and Joe set aside $10,000 for college tuition when their daughter is 13, how much will be available when she starts college at 18 if the account in which the money is deposited pays 12 percent compounded monthly?

A) $17,623.42
B) $18,170
C) $16,105.10
D) $16,122.26