Answer:
Miranda has to put $13,661 in the bank.
Step-by-step explanation:
Miranda wants to give her 14-years old daughter $20,000 when she turns 18
Miranda has 4 years to make $20,000
Rate of interest = 10% per year
Let initial deposit be $x
Final amount (A) = $20,000
Time (t) = 4 years
Rate (r) = 0.10
Formula:
[tex]A=P(1+r)^n[/tex]
Substitute the values into formula
[tex]20000\geq x(1+0.1)^4[/tex]
Now we solve for x
[tex]x\geq \dfrac{20000}{1.1^4}=13660.27\approx 13661[/tex]
Hence, Miranda has to put $13,661 in the bank.
