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4 April, 22:56

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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  1. 4 April, 23:00
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    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.
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