Improvements at a harley-davidson plant are estimated to be $7.8 million. Construction is expected to take 3 years. What is the future worth of the project in year 3 at an interest rate of 6% per year compounded quarterly, assuming the funds are allocated (a) completely at time 0, and (b) equally at the end of each year?

Question

anonymous · Answer

This is what i'm wanting to do:

Part A:
F=7,800,000(F/P,6%,12)
 = 11,064,300

Part B: 
A=11,064,300(A/F,6%,12)
 = 1,586,178.048

anonymous · Answer

@wolf1728

wolf1728 · Answer

Gee, you started another question?  Did you test my other answer?

anonymous · Answer

Yes, it seemed to make sense. It took me a while to understand it, but i finally did.

wolf1728 · Answer

Well okay - now for this one.

wolf1728 · Answer

$7.8 million 3 years at 6% compounded quarterly
Gonna be away from keyboard for a while - taking my dog for a walk. :-)

wolf1728 · Answer

6 % compounded quarterly = 6.136355062%
Total = Principal x Rate ^ years 
Total =  7.8 million * (1.06136355062)^3
At the end of the 3 years
Total =  9,325,821.74

anonymous · Answer

So how would you do part b then?