Bob wants $50,000 at the end of 7 years in order to make a down payment on a house. If his bank pays 2.2% interest, compounded annually, how much must he deposit in order to reach his goal?
PV == FV / [1 + R]^N
PV ==50,000 / 1.022^7
PV ==50,000 / 1.164544987982425685888
PV ==$42,935.22 - what must be deposited today.
