Question

to establish a college fun, what lump sum must be deposited in order to have $30,000.00 in the fund at the end 0f 15 years? Assume a 7.5% interest rate, compounded monthly

Answer 1

30000 = x [1 + (.075 / 12)]^(15 * 12)

log(30000) = log(x) + 180 log(1.0625)

Answer 2

log(30000) = log(x) + 180 log(1.0625)

should read: log(30000) = log(x) + 180 log(1.00625)

or

from the first line
300000 = x(1.00625)^180
x = 30000/1.00625^180 = 9773.73

The log equations yields the same result.

Answer 3

oops...decimal place

sorry about that