Question

suppose that a couple invested 50000 in an account when their child was born to prepare for the child college education.if the average interest is 4.4% compounded annually a.) give an exponential model for the situation and b.) will the money be doubled by the time the child turns 18 yrs old?​

Answer 1

Given :- suppose that a couple invested 50000 in an account when their child was born to prepare for the child college education.if the average interest is 4.4% compounded annually

To Find :-

a.) give an exponential model for the situation .

b.) will the money be doubled by the time the child turns 18 yrs old ?

Solution :-

we know that, when rate is compounded annually,

• Amount = Principal * [ 1 + (rate/100) ]^(time) .

we have,

• sum invested = P = Rs.50000 .
• Rate = 4.4% .
• Time = 18 years.

So,

→ Amount after 18 years = 50000[ 1 + (4.4/100) ]¹⁸

→ Amount = 50000[ 1 + 0.044 ]¹⁸

→ Amount = 50000(1.044)¹⁸

→ Amount = 50000 * 2.170

→ Amount = Rs.108,500 .

Hence, the money will be more than doubled by the time the child turns 18 years old.

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