Question

Tony Hippwaist wants to have $742,032 in his savings account in six years. Tony opened his savings account by depositing $30,000. Tony intends to make equal deposits at the end of every three months for the next six years. Tony will earn 20% interest compounded quarterly on all deposits with the bank. Calculate the amount of each equal quarterly deposit that Tony must make in order to have $742,032 in his account in six years. Use the time value of money factors to answer this question.

Answer 1

Fukume value of Amuity = R [C1+1)*-_] here R= Quaterly Deparit (not (= Intrent rate was snQUE i n = no of compound. noun In Care of Intial depauit & 1 (1+r). 8 s - 1= 2 Initial Depois a m Intraut fate n no. of compoure. E Hence Total formula bull (1+i)"+ R/ (1+0) - 11 F =

oos. Future value 2) 742032. Rate of Intrent (i)- 2010/42 0·20/4 2 0.05 compounding & Quakerty I = 30,000 n= uxogas - 24 742032= 30000 (1100) 24 +. RE (1 + Oss) 24 - 1] QUO 005 742032 2 304920 X 3-22S + R_3.998-1] ooos. DIIDIIN 1915 1 11 242032 296750 + R [8.225] 0.0S 70 70 742032 96750 + R[4u.s). Ć 742032-962.5D_ R44.5)_L 645282 a R[unos), t 645 282 44.5 r ence Tony has to depoul $14501 Quaterly for $742032 at the end of 6 years K2 T4500r7 app208 214500...

Tony has to deposit 14501 quaterly for 742032 at the end of 6th year