Question

The owner of a ski resort estimates that a new 4-person ski lift will cost $5,500,000. The owner begins making payments on March 1 and every three months thereafter for 5 years into an
account that earns 4% annual Interest compounded quarterly. What payment amount must the owner make to have the cost of the ski lift in 5 years?

Answer 1

Amount must the owner make to have the cost of the ski lift in 5 years  is $6,711,045.22.

What is compound interest?

Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest.

A = P(1 + r/n)$^{nt}$

P =5,500,000

r =4%= 0.004

n =4

t= 5 years.

Now,

A = P(1 + r/n)$^{nt}$

A = 5,500,000.00(1 + 0.04/4)$^{(4)(5)}$

A = 5,500,000.00(1 + 0.01)$^{20}$

A = $6,711,045.22

Hence, The total amount accrued is $6,711,045.22.

Learn more about compound interest here:

brainly.com/question/14295570

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