Question

In order to accumulate enough money for a down payment on a house, a couple deposits $800 per quarter into an account paying 4% compounded quarterly. If payments are made at the end of each period, how much will be in the account in 6 years

Answer 1

$21,578.77

Step-by-step explanation:

For computing the amount after 6 years we have to determine the future value i.e to be shown in the attachment below:

Given that,

Present value = $0

Rate of interest = 4% ÷ 4 quarters = 1%

NPER = 6 years × 4 quarters = 24 quarters

PMT = $800

The formula is shown below:

= FV(Rate;NPER;PMT;PV;type)

After applying the above formula, the future value is $21,578.77