Min-Jun and Min-Suh want to contribute $120000 to a 529 plan for the benefit of their new grandchild. If done shortly after the birth of the child, with a 15.00 percent annual return and no other contributions, what will the account be worth when the child is 18 and ready to enter college

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Santos Carr

21 July, 00:12

Min-Jun and Min-Suh want to contribute $120000 to a 529 plan for the benefit of their new grandchild. If done shortly after the birth of the child, with a 15.00 percent annual return and no other contributions, what will the account be worth when the child is 18 and ready to enter college

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Salma Morrison · Answer 1

The account will be worth $1,485,054.43 at the age of 18.

Explanation:

Giving the following information:

Lump sum = 120,000

Number of years = 18

Annual interest = 15%

To calculate the final value of the investment, we need to use the following formula:

FV = PV * (1+i) ^n

FV = 120,000 * (1.15^18) = $1,485,054.43

The account will be worth $1,485,054.43 at the age of 18.