Question

# : A father wants to set up a bank account that will pay his daughter \$(12,000)...

: A father wants to set up a bank account that will pay his daughter \$(12,000) at the end-of-quarter (EOQ) 4 and \$(24,000) at EOQ 8. He will fund this account by making quarterly payments of \$A from the present (time zero) through EOQ 7.
If the quarterly percentage rate is 2%, what is the value \$A that must be deposited into the account?

please i want the result by hand step by step not excel

• Like the answer and comment for query.
• We will first calculate Future value at EOQ 8 of amount to be paid to daughter at EOQ 4 & EOQ 8:
• Future Value at EOQ 8
= Value to be paid at EOQ 8 + ( Value to be paid at EOQ 4 * FVIF(2%,4 quarters))
=\$24,000 + (\$12,000*(1.02^4))
=\$ 24,000 + \$ 12,990
=\$ 36,990
• Now divide above Future value at EOQ 8 by FVAF(2%,7 quarters) which will be calculated by hand using below formula:
= ((1+r)^n - 1 ) / r
= ((1.02^8)-1) / 0.02
= 8.5830
• Value of X will be
= \$36,990 / 8.5830
= \$4309.68
• Kindly upvote.Thanks.

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