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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)

1 Answer

2 votes

Answer:

Mr. Chang will have 15714.90 dollars.

Explanation:

p = 650

r =
7.8/4/100=0.0195

Number of periods or n =
5*4=20

Future value formula is :
p[((1+r)^(n)-1)/(r) ]

Putting the values in formula we get;


650[((1+0.0195)^(20)-1)/(0.0195) ]

= $15714.90

Hence, Mr. Chang will have 15714.90 dollars.

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