Question

2. Sarah wishes to accumulate $25,000 by means of monthly deposits earning interest at nominal annual rate 8% compounded quarterly. The regular deposits will be $100 each. Find the mumber of regular deposits required. 2pts If the additional fractional deposit is made at the time of the last regular deposit, find the addi tional fractional deposit amount. [2ts If the additional fractional deposit is made one month after the last regular deposit, find the additional fractional deposit amount. 2pts

need help with all parts of question 2. Thanks

Answer 1

2. Quarterly interest rate=8%/4=2%

Say, the equivalent monthly rate is x

Hence, (1+x)^3-1=2% or, x=0.662%

Here, rate=0.662%, Future Value=$25000, regular deposit(PMT)=$-100, nper=?

А 1 FV 2 PMT 3 rate 4 nper в D 25000 -100 0.662% |=NPER(B3,B2,0,B1,0) NPER(rate, pmt, pv, [fv], [type])

Α 1 FV 2 PMT 3 rate 4 nper 25000 -100 0.662% 147.9652 5

Hence, after 147.96 or 148 months (approx) i.e. 12 year 4 months he would be able to get desired goal.

For last 2 portion of the question, I need the amount if additional fractional deposit.