A series of equal quarterly payments of $10,000 for 15 years is equivalent to what future worth amount at an interest rate of 6%

Question

VikaD [51]

3 years ago

11

A series of equal quarterly payments of $10,000 for 15 years is equivalent to what future worth amount at an interest rate of 6%

compounded at the given intervals?

Mathematics

1 answer:

kogti [31] · Answer 1 · 2021-12-17T20:22:08+03:00

Answer:

$976,578.71

Step-by-step explanation:

We assume the deposits are made at the <em>beginning</em> of each quarter. The quarterly interest rate is 6%/4 = 1.5%. The number of quarterly payments is 15×4 = 60. The future value of an annuity due is ...

A = P(1+r)((1+r)^n -1)/r

where r is the quarterly interest rate, n is the number of payments, and P is the payment amount.

A = $10000(1.015)(1.015^60 -1)/.015 ≈ $976,578.71

The future value is $976,578.71.