You deposit $100 at the end of each quarter in a sinking fund earning 4% compounded quarterly. How many quarterly deposits must you make in order to reach your goal of saving $10,000? Round your answer off to the nearest whole number.
This is the furure value of an ordinary annuity problem
S=R[(1+i)n−1i]R=100i=0.04/4=0.01S=10000,n=?quarters10000=100[(1.01)n−10.01]1=(1.01)n−12=(1.01)nlog2=log(1.01)nlog2=nlog(1.01)n=log2log1.01
log10(2)log10(1.01)=69.6607168935748303
It will take 70
70/4=17.5 years