Tomas wants to buy a $35,000 boat in 15 years when he retires. He has an opportunity to invest a one-time investment in an account that earns 11.65% interest compounded quarterly. How much will he need to invest now (one time) in order to have enough money to buy the boat in 15 years?

Part a) (2 pts) Which formula is appropriate for this problem? (Simple Interest, Compound Interest, Savings Annuity, Payout Annuity, Monthly Payment on a Loan, Maximum Loan Amount, or one of the Mortgage-specific formulas, Future Value Needed (if making a one-time deposit), Future Value Needed (if making multiple deposits))

Part b) (5 pts) How much does Tomas need to invest now in order to be able to afford the boat he wants?

• Write out
  • 1) the correct formula with variables (e.g. P₀, P_N, N, r, etc.), and
  • 2) the correct formula with the numerical values (round your answer to the nearest cent), and
  • 3) write the answer in a complete sentence.