You want to have $60,000 college fund in 12 years. How much will you have to deposit now under the scenario below. Assume that you make no deposits into the account after the initial deposit.

Question

You want to have $60,000 college fund in 12 years. How much will you have to deposit now under the scenario below. Assume that you make no deposits into the account after the initial deposit.
An APR of 8​% compounded daily. I know how to break the problem down, but I am not understanding how to get the answer.

Henry · Answer

P2 = P1(1+r)^n = $60,000. r = 0.08/365 = 0.00021918/day = Daily % rate expressed as a decimal. n = 365Comp/yr. 12yrs. = 4380 Compounding periods. P1(1.00021918)^4380 = 60,000. P1 = ?.