Question

Suppose you just had your first child and you want to begin immediately putting away for his/her college tuition. Assume that college will cost a total of 180,000 for all 4 year combined and that your child will begin college at 18. How much will you need to put away each month at a rate of 4% in order to achieve that goal?

Answer 1

The formula for compound interest is:

A=P(1+r)^t, in which

A= amount = 180,000

P= principal