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What is the size of the payment that must be deposited at the beginning of each...

What is the size of the payment that must be deposited at the beginning of each quarter in an account that pays 4.2% compounded quarterly, so that the account will have a future value of $111,000.00 at the end of 14 years?

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Answer #1

Let the size of the payment be A

Number of payments(n) = 4*14 = 56

Future value = 111,000

Interest rate per quarter(r) = 4.2/4 =1.05%

The following formula can be used to calculate the future value:

$1451.04 must be deposited every quarter at the beginning of the quarter for 14 years to get $111,000.

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