Question

A man leaves an estate of $50,000 which is invested at 9% compounded monthly. At the time of his death, he has two children aged 13 and 18. Each child is to receive an equal amount from the estate when they reach age 21. How much does each child get?

Answer 1

Let's say that he sets aside $x for the younger child, and 50000-x for the older one. Then we must have

x(1+.09/12)^96 = (50000-x)(1+.09/12)^36
x = 19488
so each child gets $39929