To Save for College, Parents Invest $20,000 for Their Newborn

question 96

Short Answer

To save for college, parents invest $20,000 for their newborn child in a mutual fund that should average 12% annual return. If the semiannually dividends are reinvested, how much will be available in 19 years?
Round your answer to the nearest cent.

---

Definitions:

Super-Ego

In Freudian psychology, the part of the mind that acts as a self-critical conscience, reflecting social standards learned from parents and teachers.

Psychodynamic Theory

A psychological perspective that examines unconscious processes and emotional factors influencing behavior, founded on the concepts of Sigmund Freud.

Neo-Analytic Theory

A contemporary approach to psychology that emphasizes the role of the ego and individual psychology over Freud's foundational psychoanalytic theories.

Wish Fulfillment

The unconscious desire to have one’s fantasies realized.