A few days ago
A trust fund for a child’s education is being set up with a single payment so that at the end of?
A trust fund for a child’s education is being set up with a single payment so that at the end of?
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A few days ago
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– 7% compounded semi annually works out to 3.5% every 6 months.
– 15 years of semi annual interest payments is 15*2=30 compoundings.
– Initial money M * (1 + semi-annual interest)^number of compoundings = 24,000.
Initial money M * (1.035)^30 = 24,000
Initial money M = 24000 / ((1.035)^30)
M = 24000 / 2.8068
M = $8,550.66
$8,550.66 should be invested today.
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