Question

is this right?? d) Instead of depositing $5,000 now, you will deposit $1,250 at the end...

is this right??

d) Instead of depositing $5,000 now, you will deposit $1,250 at the end of every quarter for the next three years into the same account paying 4.5% p.a., compounded every quarter. How much will you have at the end of the three years?

I got: $5,175

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Future Value =

where r is the rate of Return for compounding period = 4.5% /4 = 1.125% _ _ _ (Quarterly)

n is the no of compounding period 3 years * 4 = 12 _ _ _ (Quarterly)

Future Value =

= 1250 * 12.7710613955

= $ 15,963.83

NOTE: The answer to your question has been given below/above. If there is any query regarding the answer, please ask in the comment section. If you find the answer helpful, do upvote. Help us help you.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You deposit $5,000 into an account at the end of year 0. You deposit $5,000 every...
You deposit $5,000 into an account at the end of year 0. You deposit $5,000 every three (3) months beginning at the end of year 1 and continuing through the end of year 3. You also deposit into the account an amount X starting at the end of year 6 and repeat it every three (3) months for a total of four (4) deposits. You withdraw $112,160 at the end of year 7. After the withdrawal at the end of...
If you deposit $1,500 in an account paying 8%, how much will you have in 3...
If you deposit $1,500 in an account paying 8%, how much will you have in 3 years? If you deposit $1,500 into an account paying 8% compounded monthly, how much will you have in 3 years? If you deposit $1,500 in an account paying 8% today and deposit $1,500 every year into the account, how much will you have in 3 years?
You deposit $740 at the end of each quarter into an account that pays a nominal...
You deposit $740 at the end of each quarter into an account that pays a nominal annual rate of 16% compounded quarterly. How much will you have in the account at the end of 15 years?
"You plan to start saving for your retirement by depositing $9,583 exactly one year from now....
"You plan to start saving for your retirement by depositing $9,583 exactly one year from now. Each year you intend to increase your retirement deposit by 3%. You plan on retiring 30 years from now, and you will receive 6% interest compounded annually. This type of cash flow is called a geometric gradient. The formula to calculate the present worth of a geometric gradient is found in Table 3.6 in the textbook. However, in year 10, you have sudden expenses,...
Suppose that at the end of each of the next 50 years you will deposit $1000...
Suppose that at the end of each of the next 50 years you will deposit $1000 in an account paying $10% interest annually. Assuming that the first deposit will occur immediately, how much money will be in the account at the end of the 50 years? Round your final answer to two decimals. What if the first deposit will occur one year from now?
One year from now, you deposit $500 in a savings account. You deposit $1,800 the next...
One year from now, you deposit $500 in a savings account. You deposit $1,800 the next year. Then you wait two more years (t=4) and deposit $1,000. If your account earns 6% interest per year, compounded annually, and you make no further deposits or withdrawals, how much will be in the account 11 years from now?
You have deposited $10,000 in a bank earning interest at 7% p.a. compounded quarterly for four...
You have deposited $10,000 in a bank earning interest at 7% p.a. compounded quarterly for four years and five months. At that time, the interest rate changes to 6% p.a. compounded monthly. What is the value of the deposit three years after the change in the rate of interest? What nominal annual rate compounded quarterly is equivalent to 7.5% p.a. compounded monthly? You have decided to deposit $500 in the Montreal bank at the end of each quarter for seven...
Suppose you receive $1,250 at the end of each year for the next four years. a....
Suppose you receive $1,250 at the end of each year for the next four years. a. If the interest rate is 10%, what is the present value of these cash flows? b. What is the future value in three years of the present value you computed in (a)? c. Suppose you deposit the cash flows in a bank account that pays 10% interest per year. What is the balance in the account at the end of each of the next...
You want to deposit an amount of money now so that at the end of 5...
You want to deposit an amount of money now so that at the end of 5 years $500 will have been accumulated. With interest at 4% per year, which is compounded semiannually, how much should be deposited now?
If you set aside $5,000 per year (i.e., one deposit of $5,000 each year) in a...
If you set aside $5,000 per year (i.e., one deposit of $5,000 each year) in a Roth IRA for the next 25 years (the first contribution is to be made exactly one year from now, so use an ordinary annuity setup), how much will you have at your retirement in 25 years if your IRA earns 6% APR, compounded monthly?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT