The Pearsons are planning to retire in 20 years and believe that they will need $200,000 in addition to income from their retirement plan. How much must they invest today at 7.5% compounded quartely to accomplish their goal?
please help set up
The setup is the important part that you are supposed to be learning.
Look at the information given and translate to the data needed.
Given: 7.5% Annually <== I assumed this is what is meant. It should be worded more clearly.
Needed: 7.5%/4 Quarterly
Given: 20 Years
Needed: 20*4 Quarters
Given: Future Value = 200000
Needed: Current Value = This is what is wanted.