Question

Determine the accumulated value after 10 years of deposits of $205.00 made at the beginning of every three months and earning interest at 3%, with the payment and compounding intervals the same.

The accumulated value is $ ___. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed)

Answer 1

The accumulated value after 10 years of deposits of $205.00 made at the beginning of every three months and earning interest at 3%, with the payment and compounding intervals the same, is $2769.96 (rounded to the nearest cent).

Step-by-step explanation:

To determine the accumulated value after 10 years of deposits of $205.00 made at the beginning of every three months and earning interest at 3%, with the payment and compounding intervals the same, we can use the formula for compound interest:

Final amount = Principal x (1 + Interest rate/Number of compounding periods)Number of compounding periods x Number of years

Here, the principal is $205.00, the interest rate is 3%, the number of compounding periods is 4 (since the deposits are made every three months), and the number of years is 10:

Final amount = 205 x (1 + 0.03/4)4 x 10

Calculating this, we find that the accumulated value after 10 years will be $2769.96 (rounded to the nearest cent).