Find i (the rate per period) and n (the number of periods) for the following annuity. Quarterly deposits of $1,500 are made for 3 years into an annuity that pays 7.5% compounded quarterly. i=? n=? I got 0.075 and 12, but am I right?

Question

amistre64 · Answer

i is off

amistre64 · Answer

7.5 is a yearly interest amount, only a quarter of it is applied in one quarter

amistre64 · Answer

4 times a year for 3 years is fine for n

anonymous · Answer

O.k. ty

amistre64 · Answer

i might have thought to hard on i

you are trying to fill in a formula and if it has  i/4 then you are fine with that too

amistre64 · Answer

$$P(1+\frac in)^{nt}$$
if this is your formula, n=4, and i = .075

amistre64 · Answer

if your formula is:$$P(1+i)^n$$
then i = .075/4   and n=12

so its best to determine what exactly it is asking for.

anonymous · Answer

After rereading it, I concur, I think P(1+i)^n is correct.

anonymous · Answer

$$3000=500*1.02^n-1/.02$$ solve for n

amistre64 · Answer

i cant verify that, so i defer to your judgement on it :)

amistre64 · Answer

im not sure i can read your equation correctly ...  what is the last term?

anonymous · Answer

$$FV=PMT(1+i)^n-1 \over i$$

anonymous · Answer

where FV= 3000 PMT = 500 i=.02

anonymous · Answer

Its just that I keep getting different answers when I solve for n

amistre64 · Answer

$$F=\frac{P(1+i)^n-1}{i}$$
$$Fi+1=P(1+i)^n$$
$$\frac{Fi+1}{P}=(1+i)^n$$
log it to solve for n

anonymous · Answer

ok thanks

amistre64 · Answer

yep