To purchase a specialty guitar for his band, for the last three years JJ Morrison has made payments of $111 at the end of each month into a savings account earning interest at 5

Since JJ Morrison has made a payment of $111 every month from the last 10 years which is compounded at a rate of 5.41% compounded monthly. Therefore the amount at the end of 3 years which JJ Morrison will have will be calculated by using the following parameters in a financial calculator.

N(time period) = 3*12 = 36 (since monthly payment is done)

I/Y (rate of interest) = 5.41/12 = 0.450833( since monthly compounding is given)

PV(present value) = 0.

PMT ( reccuring payments) = $111

FV(amount after 3 years) = $4327.993011

The calculation for which is given as follows

{111/(1.00450083)}+{111/(1.00450083)^2}+...+{111/(1.00450083)^36}

= $4327.993011

Now we will use this amount as the present value investment which will be invested quarterly for 4 years at a rate of 6.54% compounded quarterly in a savings account by using the following parameters in a financial calculator.

N= 4*4=16(since quarterly interest is recieved)

I/Y = 6.54/4=1.635

PV = -$4327.993011( the negative sign is to denote an outflow)

PMT = 0(since no reccuring payments)

FV =?

The calculation for the same will be

4327.993011*{(1+0.01635)^16}

= $5610.211252