Answer/Discussion
to 2a
A trust fund for a 1 year old child is being set up by a single payment
so at the age of 25 the child will receive $50000. Find how much
the payment is if an interest rate of 5% compounded monthly is assumed.
*Present value formula
*Plug in values into PV form.
*Calculate number inside ( ) and exponent *Raise inside of ( ) to the -288th power
So we would have to currently put in $15097.30, to get the return
of $50000 after being compounded monthly at a rate of 5% for 24 years.
Not bad.
Answer/Discussion
to 1a 
