Question

to help with his child's college fund, Deshaun needs to invest. Assuming an interest rate of 2.29% compounded annually, how much would he have to invest to have $64,700 after 13 years?

Answer 1

Deshaun would need to invest approximately $48,603.54 to have $64,700 after 13 years with an interest rate of 2.29% compounded annually.

Step-by-step explanation:

To calculate the amount Deshaun would need to invest to have $64,700 after 13 years with an interest rate of 2.29% compounded annually, we can use the formula for compound interest:

A = P(1+r/n)^(nt

where:

A is the future value of the investment

P is the principal amount (the initial investment)

r is the annual interest rate (in decimal form)

n is the number of times that interest is compounded per year

t is the number of years

Substituting the given values into the formula:

A = $64,700

P = unknown

r = 0.0229 (2.29% in decimal form)

n = 1 (compounded annually)

t = 13

Now we can solve for P:

$64,700 = P(1+0.0229/1)^(1*13)

Re-arranging the formula, we get:

P = $64,700 / (1.0229)^13

Using a calculator or spreadsheet, we find that $64,700 / (1.0229)^13 ≈ $48,603.54

Therefore, Deshaun would need to invest approximately $48,603.54 to have $64,700 after 13 years with an interest rate of 2.29% compounded annually.