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?
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
