A company will need $45,000 in 7 years for a new addition. To meet this goal, the company deposits money in an account today that pays 5% annual interest compounded quarterly. Find the amount that should be invested to total $45,000 in 7 years.

Question

anonymous · Answer

attachment

anonymous · Answer

Quaterly is once each 3 months?

anonymous · Answer

That's what I can't figure out. ;/

anonymous · Answer

Wait, I think the example says there are 28 quarters in a year.

anonymous · Answer

Yes, it's :D
So...
Interest 5% annual is 1.25% each 3 months.
So, you'll have interest calculated 4 times a year during 7 years.
So:
(1+0.0125)^28=1,4159923036192264747591121310131
You'll got 1,4159923036192264747591121310131 times the money you deposited.
So you have to deposit 45000/1,4159923036192264747591121310131
31.779,84 (rounded up the last penny).

anonymous · Answer

Nono, 28 quarters in 7 years, 4 quarters per year.

anonymous · Answer

Oops. Ok.

anonymous · Answer

What would be the amount invested?

anonymous · Answer

31.779.84$

anonymous · Answer

Thank you! ;D