Question

1) James needs to obtain $80,000 for his daughter's future college tuition. He is looking to invest in an

Answer 1

Answer:

$ 50,340.97

Step-by-step explanation:

From the above question, we can deduce that we are to find the Initial amount invested which is also called the Principal.

The formula to find Principal in a compound interest question is:

P = A / (1 + r/n)^nt

Where:

A = Total Amount obtained after invested = $80,000

r = Interest rate = 3.1% = 0.031

n = number of times interest in compounded = Quarterly = 4

t = time in years = 15

P = $80,000/(1 + 0.031/4)^4 × 15

P = $80,000/(1 +0.00775)^60

P = $ 50,340.97

Hence, James would have to invest $50,340.97 today to have $80,000 in 15 years.