Parents wish to have $150,000 available for a child's education. If the child is now 8 years old,how much money must be set aside at 3% compounded semiannually to meet their financialgoal when the child is 18?Click the icon to view some finance formulas.The amount that should be set aside is $(Round up to the nearest dollar.)... In the provided formulas, A is the balance in the account after t years, P is theprincipal investment, r is the annual interest rate in decimal form, n is the numberof compounding periods per year, and Y is the investment's effective annual yieldin decimal form.ntrA=P [1+ = m²nA(₁ + :-)nP =P=ntA = PertY =1 +nn- 1

Given, Amount required is $150,000 rate is 3% compounded semi annually

Parents wish to have $150,000 available for a child's education. If the child is now 8 years old, how much money must be set aside at 3% compounded semiannually to meet their financial goal when the child is 18? iClick the icon to view some finance formulas.

Parents wish to have $150,000 available for a child's education. If the child is now 8 years old, how much money must be set aside at 3% compounded semiannually to meet their financial goal when the child is 18? iClick the icon to view some finance formulas.

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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Question

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Parents wish to have $150,000 available for a child's education. If the child is now 8 years old,
how much money must be set aside at 3% compounded semiannually to meet their financial
goal when the child is 18?
Click the icon to view some finance formulas.
The amount that should be set aside is $
(Round up to the nearest dollar.)
...

In the provided formulas, A is the balance in the account after t years, P is the
principal investment, r is the annual interest rate in decimal form, n is the number
of compounding periods per year, and Y is the investment's effective annual yield
in decimal form.
nt
r
A=P [1+ = m²
n
A
(₁ + :-)
n
P =
P=
nt
A = Pert
Y =
1 +
n
n
- 1

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