Question

Bob and Joy Salkind want to save $50,000 in 5 ½ years for home improvement projects. If the Bank of Aventura is paying 8% interest compounded quarterly, how much must the couple deposit now to have the money for the projects?

Answer 1

P(1+.08/4)^(4*5.5) = 50000 ??

Answer 2

First we should get the annual rate for 8% compounded quarterly
annual % = [(1 + Rate / compounding periods)^comp periods]-1
annual % = [(1.02)^4]-1
annual % = .08243216
or 8.243216

To find the total, the formula is
Total = Principal × (1 + Rate)^years
So we can say
Principal = Total / (1+Rate)^years
Principal = 50,000 / (1.08243216)^5.5
Principal = 32,341.95