To determine the principal needed to reach $60,000 in 8 years at a 9% interest rate, the formula used is 60000/((1 + .09/f)^(8*f)), where 'f' represents the compounding frequency. The discussion emphasizes the importance of knowing whether the interest is simple or compounded, as well as the specific compounding period. Participants seek clarification on these details to accurately calculate the required deposit. The conversation centers around the mathematical approach to solving the problem. Understanding the compounding method is crucial for obtaining the correct principal amount.