Question

An employee saves for her retirement by depositing $1000 a quarter. She deposits her money in an annuity which pays a return of 2% a year compounded quarterly. What will the value of the annuity be after ten years ?

Answer 1

Number of periods, n = 4*10 = 40
interest per period (quarter), i= 0.02/4=0.005
Amount per period, A=1000
Future value
=A((1+i)^n-1)/i
=44158.85
(check my numbers)