Question

Your uncle won the powerball jack[ot and decided to give you 50000 dollars. You want to save this money for college so you find an investment that has an anual interest rate of 3.75% and is compounded weekly. How much money will you have for college in 4 years

Answer 1

Answer: $58,088.57

Step-by-step explanation:

The investment is compounded weekly so you need to change the parameters of the equation to a weekly figure:

Interest rate is yearly so:

= 3.75%/52

= 3.75/52% per week

Number of periods is 4 years so:

= 4 * 52

= 208 weeks

Future value in 4 years is:

= 50,000 * ( 1 + 3.75/52%)²⁰⁸

= $58,088.57