A couple wants to have $40,000 in 5 years for a down payment on a new house.
(a) How much should they deposit today, at 6.4% compounded quarterly, to have the required amount in 5 years?
(b) How much interest will be earned?
(c) If they can deposit only $20,000 now, how much more will they need to complete the $40,000 after 5 years?
(d) Suppose they can deposit $20,000 now in an account that pays interest continuously. What interest rate would they need to accumulate the entire $40,000 in 5 years?