Asked by Thara!
                Calculate the future value of quarterly payments of $1200 for 5 years, if the rate of interest was 10% compounded quarterly for the first 2 years and will be 9% compounded quarterly for the last 3 years.
            
            
        Answers
                    Answered by
            Thara!
            
    I  solved for both which i got
aFV= $10483.34
bFV= $16322.67
to get this answer i used this formula: FV=PMT((1+i)^n))-1/i
i just don't know what do i do now?
    
aFV= $10483.34
bFV= $16322.67
to get this answer i used this formula: FV=PMT((1+i)^n))-1/i
i just don't know what do i do now?
                    Answered by
            MathMate
            
    See answer to repost:
http://www.jiskha.com/display.cgi?id=1271904679
    
http://www.jiskha.com/display.cgi?id=1271904679
                    Answered by
            Reiny
            
    At the end of the first 2 years, the value of the payments up to that point will be
1200 ( 1.025^8 - 1)/.025 = 10483.339 (you had that)
let's "move" that up to the end of 5 years at the new rate
value = 10483.339(1.0225^12) = 13691.765
Amount of the last 3 years' payments at year 5
= 1200( 1.0225^12 - 1)/.0225 = 16322.666
so total amount = 16322.666 + 13691.765 = $30 014.43
    
1200 ( 1.025^8 - 1)/.025 = 10483.339 (you had that)
let's "move" that up to the end of 5 years at the new rate
value = 10483.339(1.0225^12) = 13691.765
Amount of the last 3 years' payments at year 5
= 1200( 1.0225^12 - 1)/.0225 = 16322.666
so total amount = 16322.666 + 13691.765 = $30 014.43
                    Answered by
            Reiny
            
    Damon, didn't see that you already did this question.
Well, at least we agree down to the last penny, lol
    
Well, at least we agree down to the last penny, lol
                    Answered by
            Thara!
            
    Thank u soo much...u both really helped me at the right time...i have final exam tomorrow...and i am now prepared..thanks again!!!
    
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