Question

Armando and Mikayla have a new grandson. How much money should they invest now so that he

will have $80,000 for his college education in 18 years? The money is invested at 8% compounded
annually

Answer 1

9514 1404 393

Answer:

$20,020

Explanation:

The future value formula is helpful.

FV = P(1 +r)^t

$80,000 = P(1.08^18) = 3.9960195P

P = $80,000/3.9960195 = $20,019.92

They should invest about $20,020 now.