Question
Mrs. Rogers wants to take a trip in ten years, she can save 650 every 3 months and earns 7.8% compounded quarterly. How much is her account worth at 5 years?
What formula should I be using for this? None of them I have tried seem to give me near the correct answer.
What formula should I be using for this? None of them I have tried seem to give me near the correct answer.
Answers
Reiny
This is a normal amount of annuity problem
payment = 650
i = .078/4 = .0195
n = 4(5) = 20
amount = 650 ( 1.0195^20 - 1)/.0195
= $15,714.90
payment = 650
i = .078/4 = .0195
n = 4(5) = 20
amount = 650 ( 1.0195^20 - 1)/.0195
= $15,714.90