Question

Marceille plans to save $50 every three months over the next 5 years. How much will be in her account when she makes the last deposit, if her account earns a nominal interest rate of 6 percent, compounded quarterly?

Answer 1

amount = $1156.18

Step-by-step explanation:

given data

save = $50

time = 5 year

interest rate = 6 percent

solution

here number of payment per annual will be 4

so interest rate per period will be

interest rate =
`(0.06)/(4)` .

interest rate = 1.50 %

and no of period will be = 5 × 4 = 20

and payment per period is $50

we apply here amount formula formula after 5 year

amount = payment per period ×
`((1+r)^t-1)/(r)` ....................1

amount = $50 ×
`((1+0.015)^(20)-1)/(0.015)`

amount = $1156.18