Question

If deposits of $5,000 are made each quarter into an account paying 4.8% compounded quarterly, how much will be in the account after 20 years?

Answer 1

Are we assuming the deposits are made at the start of the quarter and the interest paid at the end?

Answer 2

So you pay it in on january first and get the interest on march 31st. Then deposit again on the 1st of april.

Answer 3

Imma go ahead and assume that is the case.

Answer 4

yes

Answer 5

Well I know how to do it in quite a long winded way.
If you get 4.8% interest on $5,000 then just multiply 5000 by 1.048 to get the total afterward. Then add 5,000 and multiply the new number by 1.048. Then add another 5000 and times that by 1.048 and repeat 80 times in total :P

Answer 6

So you'd have something like,
....(((((5,000 x 1.048) + 5,000) x 1.048) + 5,000) x 1.048)

Answer 7

There's probably a way to factorise that to make it a lot easier but I don't know it.

Answer 8

Just kidding, I was using the wrong formula! Thank you though!

Answer 9

Just kidding? You were joking? :P