Exponential Functions

Question

A 529 Plan is a college-savings plan that allows relatives to invest money to pay for a child's future college tuition; the account grows tax-free. Lily wants to set up a 529 account for her new granddaughter and wants the account to grow to $41,000 over 17 years. She believes the account will earn 2% compounded monthly. To the nearest dollar, how much will Lily need to invest in the account now?

          A(t)=P(1+r/n)^nt

Answer 1

Plug in the numbers...

 

41,000 = P (1 + .02/12)^12(17)