Following the birth of a child, a parent wants to make an initial investment Po that will grow to $50,000 for the child’s education at age 17. Interest is compounded continuously at 5%. What should the initial investment be? Such an amount of called the present value of $50,000 due 17 years from now. The present value is about $?

Following the birth of a child, a parent wants to make an initial investment Po that will grow to $50,000 for the child’s education at age 17. Interest is compounded continuously at 5%. What should the initial investment be? Such an amount of called the present value of $50,000 due 17 years from now. The present value is about $?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 11EA: How much would you invest today in order to receive $30,000 in each of the following (for further...

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