question archive Beverly hills began working as a newspaper delivery person on January 1, 2004
Beverly hills began working as a newspaper delivery person on January 1, 2004
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Beverly hills began working as a newspaper delivery person on January 1, 2004. After 3-month periods, she deposits $ 300 into her bank account, which earns 8% annually, which is compounded quarterly. On December 31, 2007, he withdrew the balance from his bank account and invested it in a fund that pays 12% per year. How much will it have as of December 31, 2010?
Beverly hills began working as a newspaper delivery person on January 1, 2004. After 3-month periods, she deposits $ 300 into her bank account, which earns 8% annually, which is compounded quarterly. On December 31, 2007, he withdrew the balance from his bank account and invested it in a fund that pays 12% per year. How much will it have as of December 31, 2010?
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First, we calculate the future value of the quarterly payments after 4 years (January 2004 - December 2007). Then, we calculate the future value of that single amount after 3 years (December 2007 - December 2010):
FV = P * ((1 + r / n) tn - 1) / (r / n)
FV = 300 * ((1 + .08 / 4) 4 * 4 - 1) / (.08 / 4)
FV = 300 * (1.02 16 - 1) / .02
FV = 300 * 18.63929
FV = 5,591.79
FV = PV * (1 + r / n) tn
FV = 5591.79 * 1.02 3 * 4
FV = 5591.79 * 1.02 12
FV = 5591.79 * 1.268242
FV = 7,091.74
