Question

Kayla's parents need to have $20,000 available in 18 years to pay for their daughter's first year of college. Find the lump sum they must invest now if the investment is paying 8% Interest rate per year​

Answer 1

`~~~~~~ \textit{Simple Interest Earned Amount} \\\\ A=P(1+rt)\qquad \begin{cases} A=\textit{accumulated amount}\dotfill & \$20000\\ P=\textit{original amount deposited}\\ r=rate\to 8\%\to (8)/(100)\dotfill &0.08\\ t=years\dotfill &18 \end{cases} \\\\\\ 20000=P[1+(0.08)(18)]\implies \cfrac{20000}{1+(0.08)(18)}=P \\\\\\ \cfrac{20000}{2.44}=P\implies 8196.72\approx P`