Question

Help Save & I ter 20 Homework 2 After paying off a car loan or crednt card, don't remove this amount from your budget Instead, invest in your future by applying some of ttoyour retirement account How much would S40m ested at the end of each quarter be worth n 8 ea sa 4% e estr Do not round intermediate calculetions. Round your answer to the nearest cent) Ned Type here to seamch 8 5 6 W E F G H

Answer 1

Here, we need to apply the formula for the future value of an ordinary annuity to find out the amount after 8 years

Future Value of an Ordinary Annuity = P x [{(1+ r)ⁿ - 1} / r ]

Quarterly Payment (P) = $410 per quarter

Quarterly Interest Rate (r) = 1% per quarter [4% / 4]

Number of years (n) = 32 Years [8 Years x 4]

Therefore, Future Value of an Ordinary Annuity = P x [{(1+ r)ⁿ - 1} / r ]

= $410 x [{(1 + 0.01)³² - 1} / 0.01]

= $410 x [(1.374940 – 1) / 0.01]

= $410 x [0.374940 / 0.01]

= $410 x37.49406

= $15,372.57

“Hence, the amount after 8 years would be $15,372.57”