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lawyer [7]
2 years ago
7

If Gerry makes a deposit of $1,500 at the end of each quarter for five years, how much will he have at the end of the five years

assuming a 12% annual return and quarterly compounding?
Business
1 answer:
Basile [38]2 years ago
7 0

Answer:

The Final Value is $40,305.56

Explanation:

Giving the following information:

Gerry deposits $1,500 at the end of each quarter for five years.

Interest rate= 12% quarterly compounding

To calculate the final value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= quarterly deposit= 1,500

i= 0.12/4= 0.03

n= 5*4= 20

FV= {1,500*[(1.03^20)-1]} / 0.03

FV= $40,305.56

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In this question we use the formula of break-even point in unit sales which is shown below:

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