1. When the Gupta's granddaughter was born recently, they opened a saving account in her name with a
deposit of $1000. In addition, they plan to add $100 to the account every quarter up to and including her
thirteenth birthday. If the account earns interest at 4% compounded quarterly, how large will her account be
when she turns 13?
+118725 1. When the Gupta's granddaughter was born recently, they opened a saving account in her name with a
deposit of $1000. In addition, they plan to add $100 to the account every quarter up to and including her
thirteenth birthday. If the account earns interest at 4% compounded quarterly, how large will her account be
when she turns 13?
The first $1000 is a straight compound interest questions
FV = 1000*1.01^52
FV= $1677.68
The ongoing $100 deposits is the future value of an ordinary annuity.
i=0.04/4=0.01 n=13*4=52 months C=100
\(FV=100*\frac{1.01^{52}-1}{0.01}\\\\ FV=6776.89\)
So altogether she will have 1677.68+6776.89 = $8454.57 on her 13th birthday. :)
Guest answerer, you got the same answer as I did but without working your answer had no teaching value and no one who understood could check your answer unless they did the whole thing themselves. But good work, you did get it correct. If you used a site to get the answer you should have shared that with us as well :))
+118725 1. When the Gupta's granddaughter was born recently, they opened a saving account in her name with a
deposit of $1000. In addition, they plan to add $100 to the account every quarter up to and including her
thirteenth birthday. If the account earns interest at 4% compounded quarterly, how large will her account be
when she turns 13?
The first $1000 is a straight compound interest questions
FV = 1000*1.01^52
FV= $1677.68
The ongoing $100 deposits is the future value of an ordinary annuity.
i=0.04/4=0.01 n=13*4=52 months C=100
\(FV=100*\frac{1.01^{52}-1}{0.01}\\\\ FV=6776.89\)
So altogether she will have 1677.68+6776.89 = $8454.57 on her 13th birthday. :)
Guest answerer, you got the same answer as I did but without working your answer had no teaching value and no one who understood could check your answer unless they did the whole thing themselves. But good work, you did get it correct. If you used a site to get the answer you should have shared that with us as well :))
