Question

Your grandfather started his own business 52 years ago. He opened an investment account at the end of his third month of business and contributed $x. Every three months since then, he faithfully saved another $x. His savings account has earned an average rate of 5.73 percent annually. Today, his account is valued at $289,209.11. How much did your grandfather save every three months assuming he saved the same amount each time?
a. $284.02
b. $262.25
c. $331.09
d. $226.78
e. $328.67

Answer 1

Answer:

The answer is:D) $226.78

Explanation:

To calculate the amount of money your grandfather deposited every 3 months during 52 years to get $289,209.11 we can use an excel spreadsheet and the payment function =PMT(rate,nper,pv,fv)

where:

• rate = 5.73% / 4 = 1.4325%
• nper = 52 x 4 = 208
• pv = 0
• fv = 289,209.11

PMT = $226.78