Camellia plants to go for vacation to Australia and three ye

Camellia plants to go for vacation to Australia and three years from now. She estimates that she will need $25, 292 for the trip.

how much does she need to place in savings account today that earns 5. 80% per year compounded quarterly to accumulate that amount?

Given is a case of calculation of present value of money. And the calculation is below:

Each quarter compounding results in a total of 4 compounding effects in a year as an year consists of four quarters.

Today she must put 21,279.36 in her account to receive 25,292 after three years.

*Hope the above explanation helps, please comment if further explanation is required. Your rating is appreciated*

Present value of money:	=	FV/ (1+r/M) ^{^MN}



Future value	FV=	25,292.00
Rate of interest	r=	5.8%

Number of compounding periods in a year	M=	4



Number of years	N=	3

Present value	=	25292/ (1+0.058/4)^3*4
	=	$ 21,279.36