Question

The amount of an ordinary $7,500.00 annuity for 3 years at 12 percent compounded quarterly is

Answer 1

$\bf \qquad \qquad \textit{Future Value of an ordinary annuity}\\ \left. \qquad \qquad \right.(\textit{payments at the end of the period}) \\\\ A=pymnt\left[ \cfrac{\left( 1+\frac{r}{n} \right)^{nt}-1}{\frac{r}{n}} \right]$

$\bf \qquad \begin{cases} A= \begin{array}{llll} \textit{accumulated amount}\\ \end{array} & \begin{array}{llll} \end{array}\\ pymnt=\textit{periodic payments}\to &7500\\ r=rate\to 12\%\to \frac{12}{100}\to &0.12\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{quarterly, thus four times} \end{array}\to &4\\ t=years\to &3 \end{cases} \\\\\\ A=7500\left[ \cfrac{\left( 1+\frac{0.12}{4} \right)^{4\cdot 3}-1}{\frac{0.12}{4}} \right]$