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

money that department deposit is $402.98

Step-by-step 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 ×
`((1+r)^t - 1)/(r)` ................1

here r is rate that is
`(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 ×
`((1+0.04)^(20) - 1)/(0.04)`

principal = 402.98

so money that department deposit is $402.98