i need some help

Question

Suppose $600 is deposited into an account every quarter. The account earns 5% interest, compounded quarterly. What is the future value of the account after 5 years?

Answer 1

Hi Jane,

Use the Future Value equation just used in your last problem!

P = periodic payment = $600 / quarter

r = interest rate = 5%, compounded monthly

t = 5 years

n = 4 months (# of times interest is compounded per year)

B = Future Value = P((1+r/n)^nt - 1)/(r/n)

See if you can figure it out!