The discussion centers on calculating the principal amount needed to achieve a future value of $60,000 in 8 years at an interest rate of 9%. The formula used is 60000/((1 + .09/f)^(8*f)), where 'f' represents the compounding frequency. Participants emphasize the importance of specifying whether the interest is simple or compounded, as this significantly affects the calculation. Understanding the compounding period is crucial for accurate results.
PREREQUISITESStudents studying finance, individuals planning for future investments, and anyone interested in understanding the principles of interest calculations.
brownrebecca333 said:Homework help please: If I want to have $60,000 in 8 years, how much would I need to deposit in the bank today if the account pays an interest rate of 9%?
60000/((1 + .09/f)^(8*f)) where f = compounding frequencybrownrebecca333 said:Homework help please: If I want to have $60,000 in 8 years, how much would I need to deposit in the bank today if the account pays an interest rate of 9%?