Question

Min-Jun and​ Min-Suh want to contribute ​$120000 to a 529 plan for the benefit of their new grandchild. If done shortly after the birth of the​ child, with a 15.00 percent annual return and no other​ contributions, what will the account be worth when the child is 18 and ready to enter​ college

Answer 1

The account will be worth $1,485,054.43 at the age of 18.

Step-by-step explanation:

Giving the following information:

Lump sum= 120,000

Number of years= 18

Annual interest= 15%

To calculate the final value of the investment, we need to use the following formula:

FV= PV*(1+i)^n

FV= 120,000*(1.15^18)= $1,485,054.43

The account will be worth $1,485,054.43 at the age of 18.