Question

You decide to start saving up to buy your first home. You find an account that pays 8% interest compounded monthly. If you plan on purchasing your home in ten years, how much must you put into the account to have $50,000 for a down payment?

Answer 1

The formula is
A=p (1+r/k)^kt
A down payment 50000
P the amount you must put ?
R interest rate 0.08
K compounded monthly 12
T time 10 years
Solve the formula for p
P=A÷(1+r/k)^kt
P=50,000÷(1+0.08÷12)^(12×10)
p=22,526.17