Beginning three months from now, you want to be able to withdraw $3,600 each quarter from your bank account to cover college exp

Question

3 years ago

7

Beginning three months from now, you want to be able to withdraw $3,600 each quarter from your bank account to cover college exp

enses over the next four years. If the account pays .76 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next four years

Business

1 answer:

anzhelika [568] · Answer 1 · 2022-07-19T06:58:36+03:00

Answer:

$54,042.77

Explanation:

For computing the amount need to have in your bank today we need to apply the present value formula i.e to be shown in the attachment

Given that,

Future value = $0

Rate of interest = 0.76%

NPER = 4 quarters × 4 = $3,600

PMT = $3,600

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after applying the above formula, the present value is $54,042.77