Question

# Present and future value tables of \$1 at 3% are presented below: N FV \$1 PV...

Present and future value tables of \$1 at 3% are presented below:

 N FV \$1 PV \$1 FVA \$1 PVA \$1 FVAD \$1 PVAD \$1 1 1.03000 0.97087 1.0000 0.97087 1.0300 1.00000 2 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087 3 1.09273 0.91514 3.0909 2.82861 3.1836 2.91347 4 1.12551 0.88849 4.1836 3.71710 4.3091 3.82861 5 1.15927 0.86261 5.3091 4.57971 5.4684 4.71710 6 1.19405 0.83748 6.4684 5.41719 6.6625 5.57971 7 1.22987 0.81309 7.6625 6.23028 7.8923 6.41719 8 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028 9 1.30477 0.76642 10.1591 7.78611 10.4639 8.01969 10 1.34392 0.74409 11.4639 8.53020 11.8078 8.78611 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794

At the end of each quarter, Patti deposits \$1,700 into an account that pays 12% interest compounded quarterly. How much will Patti have in the account in 4 years?

Patti have in the account in 4 years will be calculated using the future value formula or compound interest quarterly will be used.

Future value = Present Value ( 1   + r )n

Present value = \$ 1700 (given)

r = 3% ( 12 % is annual interest for 3 months we will divide 12% / 4 it will be 3 %, we have divided by 4 because in a year 4 quarters are there)

n= no of period so 16 quarters in 4 years

Future value = 1700 ( 1   + 0.03 )16

Future value = 1700(1.03)16

Future value = 1700 ( 1.60471 )

At Future value (1.03)16 will be 1.60471 as given above

Future value = \$ 2728.007

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