how much should a mother invest at the time her son is born in order to provide him with $50,000 at age 18…

how much should a mother invest at the time her son is born in order to provide him with $50,000 at age 18? assume that the interest is 9% compounded monthly. the mother should invest $ (do not round until the final answer. then round to the nearest cent as needed.)

how much should a mother invest at the time her son is born in order to provide him with $50,000 at age 18? assume that the interest is 9% compounded monthly. the mother should invest $ (do not round until the final answer. then round to the nearest cent as needed.)

Answer

Explanation:

Step1: Identify variables

FV=$50000, r=0.09, n=12, t=18

Step2: Calculate nt

nt=12×18=216

Step3: Calculate monthly rate

r/n=0.09/12=0.0075

Step4: Compute compound factor

(1+0.0075)^216≈5.022147

Step5: Find PV

PV=50000/5.022147≈9955.90

Answer:

9955.90