Question

Suppose that you earned a bachelor's degree and now you're teaching middle school. The school district offers teachers the opportunity to take a year off to earn a master's degree. To achieve this goal, you deposit $1500 at the end of every three months in an annuity that pays 5.5% compounded quarterly. How much will you have saved at the end of 6 years? Find the interest.

Answer 1

Answer: The required interest is $581.76.

Step-by-step explanation:

Since we have given that

Sum = $1500

Rate compounded quarterly = 5.5%

Number of years = 6 years

Using "Compound interest" we get :

$A=P(1+\dfrac{r}{n})^nt}\\\\A=1500(1+\dfrac{0.055}{4})^{4\times 6}\\\\A=1500(1.01375)^{24}\\\\A=2081.76$

So, compound interest would be

$Amount-sum=2081.76-1500=581.76$

Hence, the required interest is $581.76.