This video tutorial teaches how to save for college using the compound interest formula. It explains the components of the formula, such as principal, interest rate, and time, and applies them to a case study involving the Heskett family. The video demonstrates how to graph nonlinear inequalities to visualize investment growth and identify constraints. It concludes with solutions for ensuring sufficient funds for college education.

What is the purpose of the compound interest formula?

• To calculate simple interest annually

• To compute interest more frequently than annually

• To determine the principal amount only

• To calculate taxes on investments

What is the estimated cost for Claire's college education?

• $50,000

• $100,000

• $150,000

• $200,000

How much inheritance does Mr. Heskett plan to invest for his daughters?

• $100,000

• $75,000

• $90,000

• $60,000

What is the interest rate used in Claire's investment equation?

• 0.05

• 0.07

• 0.09

• 0.11

How many years does Claire have for her investment to grow?

• 15 years

• 18 years

• 13 years

• 10 years

What is the minimum amount Eliza needs before starting college?

• $100,000

• $120,000

• $180,000

• $150,000

How many additional years does Eliza have compared to Claire for her investment?

• 1 year

• 2 years

• 3 years

• 4 years

What is the maximum principal amount the Heskett family can invest for each daughter?

• $30,000

• $40,000

• $45,000

• $50,000

What is the shortest time the investments need to grow to meet the education costs?

• 10.43 years

• 11.5 years

• 9.5 years

• 8.5 years

How much should the Heskett family invest right now to meet the education costs?

• $45,000 per daughter

• $29,865 per daughter

• $35,000 per daughter

• $40,000 per daughter