### Investment Calculation Problem**Problem Statement:**Laura needs to invest to help with her child's college fund. How much would she have to invest to have $63,400 after 13 years, assuming an interest rate of 2.21% compounded monthly?**Instructions:**- Do not round any intermediate computations.- Round your final answer to the nearest dollar.- If necessary, refer to the list of financial formulas.**Input Box and Controls:**- **Input Box:** A field to enter the calculated investment amount in dollars.- **Controls:** - **'X' Button:** Clear the input. - **'Reset' Button:** Reset the problem. - **'Help' Button:** Access additional help or hints.### Explanation:This problem involves determining the initial investment amount required to reach a target future value given a fixed interest rate compounded monthly over a specified period. The relevant financial formula to use here is the present value formula for compound interest.**Formula:**\[ PV = \frac{FV}{(1 + \frac{r}{n})^{nt}} \]Where:- $ PV $ = Present Value (initial investment amount)- $ FV $ = Future Value (\$63,400)- $ r $ = annual interest rate (0.0221)- $ n $ = number of times interest is compounded per year (12)- $ t $ = number of years (13)By substituting the given values into the formula, you can compute the amount Laura needs to invest to achieve the stated goal.

Future Value = $63,400 Time Period = 13 Years Interest Rate = 2.21%

Laura needs to invest to help with her child's college fund. How much would she have to invest to have $63,400 after 13 years, assuming an interest rate of 2.21% compounded monthly? Do not round any intermediate computations, and round your final answer to the nearest dollar. If necessary, refer to the list of financial formulas. $0 X

Laura needs to invest to help with her child's college fund. How much would she have to invest to have $63,400 after 13 years, assuming an interest rate of 2.21% compounded monthly? Do not round any intermediate computations, and round your final answer to the nearest dollar. If necessary, refer to the list of financial formulas. $0 X

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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