Question

Suppose that you earned a bachelor's degree and now you're teaching middle school. The school district offers teachers the opportunity to take a year off to earn a master's degree. To achieve this goal, you deposit $1500 at the end of every three months in an annuity that pays 5.5% compounded quarterly. How much will you have saved at the end of 6 years? Find the interest.

Answer 1

Answer: The required interest is $581.76.

Explanation:

Since we have given that

Sum = $1500

Rate compounded quarterly = 5.5%

Number of years = 6 years

Using "Compound interest" we get :

`A=P(1+(r)/(n))^nt}\\\\A=1500(1+(0.055)/(4))^(4* 6)\\\\A=1500(1.01375)^(24)\\\\A=2081.76`

So, compound interest would be

`Amount-sum=2081.76-1500=581.76`

Hence, the required interest is $581.76.