##### Homework help needed

label Accounting
account_circle Unassigned
schedule 1 Day
account_balance_wallet \$5

Gina has planned to start college education in 4 years from now. To pay for her college education, she has decided to save \$1000 a quarter for the next 4 years in a bank account paying 12% interest (Compounded Quarterly). How much will she have at the end of 4th year? (Round to the nearest whole dollar)

Oct 17th, 2017

Working on it now. Will have it in a few minutes :)

Jun 23rd, 2015

okay, thank you

Jun 23rd, 2015

The answer is \$20,157. Give me just a bit more time to type out the steps for you:)

Jun 23rd, 2015

SO, I tried to make this as simple as possible. First, we need to look at the Future Value of Annuity which can be calculated through the equation:

Future Value of Annuity (FVA) = Annuity * [(1+i)n - 1] / i

Key:

i = Interest rate,

n = Number of payments

Pluggin in our numbers,

FVA = \$1,000 * [(1+12%/4)4*4 - 1] / (12%/4)

= \$1,000 * [1.605-1] / 3% --> 1000/.03= 3,333.33 . And 1.605-1 = .605. So now we just multiply the two numbers:

= 3,333.33 * 0.605

= 20,156.88

Future Value of Annuity (FVA) = \$20,156.88. --> ROUND TO NEAREST DOLLAR \$20,157

Jun 23rd, 2015

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Oct 17th, 2017
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Oct 17th, 2017
Oct 18th, 2017
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