Question

$1800 per quarter for 7 years. How much did she have at the end of the seventh year if the interest rate is12% per year compounded monthly?

Answer 1

Answer:

Final value= $28,772.33

Explanation:

Giving the following information:

$1800 per quarter for 7 years.

Number of years= 7

Annual interes= 12% compounded monthly

We need to use the following formula to calculate the final value:

FV= {A*[(1+i)^n-1]}/i

A= semestral deposit= 1,800

n= 7*2= 14

i= {1+(0.12/12)^2} - 1= 0.0201

FV= {1,800*[(1.0201^14)-1]}/0.0201= $28,772.33