You have a target to have € 22818 in your savings account in 5 years time....
You have a target to have € 22818 in your savings account in 5 years time. You are prepared to make equal quarterly payments into your account during that time. If the account pays 4% interest annual what the amount you must to deposit each quarter?
Homework Answers
| Amount | Calculation | |
| Future value | 22818 | Given |
| Time | 5 | Given |
| Effective quarterly rate | 0.985340655 | ((1.04^(1/4))-1)*100 |
| Number of quarters | 20 | 5*4 |
| Quarterly installment | 1,037.77 | PMT function in excel |
We can also calculate the quarterly payment using a financial
calculator.
N = 20
I/Y = 0.985340655
FV = 22818
CPT PMT = 1037.766068
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