If you invest $5,000 today at an annual interest rate of 6.35%,how much money will you have for your daughter's college education in 18 years?
A)$5,603
B)$10,000
C)$15,144
D)There is not enough information to answer this question.

Question

Quizplus · Accepted Answer

This is a compound interest problem, and we can use the formula A=P(1+r/n)^(nt), where A is the final amount, P is the principal (initial amount), r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years. In this case, we have P=$5,000, r=6.35%, n=1 (interest is compounded annually), and t=18. Using these values, we can find A:

A = $5,000(1+0.0635/1)^(1*18)
A = $5,000(1.0635)^18
A = $15,143.86

Therefore, the answer is C) $15,144

If You Invest $5,000 Today at an Annual Interest Rate