Question

Mr. Chang wants to retire in 10 years. He deposits $650.00 every three months into his retirement investment account. If the account's interest rate is 7.8% compounded quarterly, how much will he have at the end of 5 years, when 20 quarterly deposits of $650.00 have been made?
Give answer in US dollars and cents rounded to the nearest cent (do NOT enter "$" sign)

Answer 1

Answer:

Mr. Chang will have 15714.90 dollars.

Step-by-step explanation:

p = 650

r = $7.8/4/100=0.0195$

Number of periods or n = $5\times4=20$

Future value formula is : $p[\frac{(1+r)^{n}-1}{r} ]$

Putting the values in formula we get;

$650[\frac{(1+0.0195)^{20}-1}{0.0195} ]$

= $15714.90

Hence, Mr. Chang will have 15714.90 dollars.