7 10 pts A couple plans to save for child parents when their

7. (10 pts.) A couple plans to save for child parents when their their What money earns child is born in order to have smsro when the radesheedw 8% interest, compounded quarterly.

Solution

We have to use the formula of compound interest which is

A=P(1+r/n)^(nt)

A is the amount after t years

P is the principal

r is the rate in decimal and n= 4 in case of compounded quartely

A= 40000(1+.08/4)^(4*30)

A= 40000(4.08/4)^(120)

A= $430,606.5