Question

Miranda wants to give her 14-year-old daughter $20,000 when she turns 18. How much does she need to put in the bank now if the interest rate is 10 percent per year?

Answer 1

well I'll assume its a compound interest question

\[A = P(1 + r)^n\]

so in your question A = 20000, n = 4 and r = 0.1

so

\[20000 = P(1 + 0.1)^4\]

make P the subject

\[P + \frac{20000}{(1.1)^4}\]

all you need to do is evaluate

hope this helps.

Answer 2

thanks