Answer:
A) $121,192
B) 4.5 years
Explanation:
A) The parents had $170,000, but gave $26,000 to Courtney, and spent $48,000 in vacations during for years.
For all purposes, the initial invested amount is now:
170,000 - 26,000 - 48,000 = 96,000
They invest that amount for four years under an interest rate of 6%. Using the future value of an investment formula, we can find the future value of this amount:
X = $96,000 (1 + 0.06)^4
X = $121,192
So, the answer for a) is $121,192
B) If each graduate school year costs $26,660, dividing the two numbers we obtain:
121,192 / 26,660 = 4.5
So you will be able to stay in graduate school for 4.5 years.
