Problema Solution
At his son's birth, a man invested $2,000 in a mutual fund earning 6.5% for his son's college education. Approximately how much, to the nearest dollar, will be available in 19 years?
Answer provided by our tutors
We will assume that the invested amount is compounded annually.
P = $2,000
r = 0.065 or 6.5%
t = 19 years
A = the future value
A = P(1 + r)^t
A = 2000(1 + 0.065)^19
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click here to see the step by step calculation for A
........
A = $6,617
In 19 years $6,617 will be available.