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Homework answers / question archive / If a single payment of $4,500 at time 0 and $240 per quarter deposits in years 2 through 6( a total of 17 deposits) are deposited at an interest rate of 6% per quarter, compounded quarterly, the money in the savings account at the end of year 6 would be closest to: Select one: a
If a single payment of $4,500 at time 0 and $240 per quarter deposits in years 2 through 6( a total of 17 deposits) are deposited at an interest rate of 6% per quarter, compounded quarterly, the money in the savings account at the end of year 6 would be closest to: Select one: a. $30,665 b. $24,991 C. $31, 151 d. $12, 159
We can solve it like this. B is the right answer.
| Quarter | Deposit | Future value = Deposit*(1+6%)^(24-Quarter) |
| 0 | 4,500.00 | 18,220.21 |
| 1 | - | |
| 2 | - | |
| 3 | - | |
| 4 | - | |
| 5 | - | |
| 6 | - | |
| 7 | - | |
| 8 | 240.00 | 609.68 |
| 9 | 240.00 | 575.17 |
| 10 | 240.00 | 542.62 |
| 11 | 240.00 | 511.90 |
| 12 | 240.00 | 482.93 |
| 13 | 240.00 | 455.59 |
| 14 | 240.00 | 429.80 |
| 15 | 240.00 | 405.47 |
| 16 | 240.00 | 382.52 |
| 17 | 240.00 | 360.87 |
| 18 | 240.00 | 340.44 |
| 19 | 240.00 | 321.17 |
| 20 | 240.00 | 302.99 |
| 21 | 240.00 | 285.84 |
| 22 | 240.00 | 269.66 |
| 23 | 240.00 | 254.40 |
| 24 | - | |
| Total | 24,751.30 |
