Question

The Math department purchased a copy machine for $ 12000. After 5 years, the machine will be worthless. How much money should the department deposit at the end of each quarter, if the money is worth 8% compounded quarterly, in order to save enough to buy a new copy machine at the end of 5 years?

Answer 1

Answer:

money that department deposit is $402.98

Explanation:

given data

amount = $12000

time = 5 year

rate = 8%  compounded quarterly

to find out

How much money should the department deposit at the end of each quarter

solution

we will use here equation that is

amount = principal × $\frac{(1+r)^t - 1}{r}$    ................1

here r is rate that is $\frac{8}{4}$ = 4% = 0.04 and t is time i.e 5 × 4 = 20

so put all these value in equation 1 we get

12000 = principal × $\frac{(1+0.04)^{20} - 1}{0.04}$

principal = 402.98

so money that department deposit is $402.98