The total amount of money which the Stewart family would have to pay into the annuity each quarter is $242.12.
<h3>How to calculate the payment?</h3>
Mathematically, annuity can be calculated by using this formula:
<u>Given the following data:</u>
- Number of times compounded (quarterly), n = 4.
- Present value, A = $13,000.
- Interest rate, r = 3.6% = 0.036.
Substituting the given parameters into the formula, we have;
P = 13000/53.6932898522
P = $242.12.
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Complete Question:
The Stewart family wants to save money to travel the world. They plan to invest in an ordinary annuity that earns 3.6% interest, compounded quarterly. Payments will be made at the end of each quarter. How much money do they need to pay into the annuity each quarter for the annuity to have a total value of $13,000 after 11 years?