Final answer:
To find the lump sum amount that could be deposited in a bank account today at 7.3% compounded quarterly to allow $101 withdrawals at the end of each quarter for 6 years, you can use the formula for the future value of an ordinary annuity.
Step-by-step explanation:
To find the lump sum amount that could be deposited in a bank account today at 7.3% compounded quarterly to allow $101 withdrawals at the end of each quarter for 6 years, we can use the formula for the future value of an ordinary annuity:
FV = PMT * ((1 + r/n)^(n*t) - 1) / (r/n)
Where FV is the future value, PMT is the payment per period, r is the annual interest rate, n is the number of compounding periods per year, and t is the number of years.
In this case, PMT is $101, r is 7.3% or 0.073, n is 4 (quarterly compounding), and t is 6. Plugging in these values into the formula, we get:
FV = 101 * ((1 + 0.073/4)^(4*6) - 1) / (0.073/4) ≈ 3756.41
Therefore, the lump sum amount that could be deposited in the bank account today is approximately $3756.41.