Your bank pays 8% interest, compounded quarterly. How much should you deposit now to yield and annuity payment of $1300 at the beginning of each three months, for 2 years?
+118608 I am thinking
You could just do present value of an ordinary annuity
where
n=8-1=7
i=0.02
amount = 1300
And then when you get your present value just add $1300 onto it.
This is because that 1300 went into the bank and then was withdrawn immediately. so it can just be tacked on at the end of the problem.
+118608 This is a present value of an annuity due question.
Do you have a list of formulas to choose from?
i=2%=0.02
n=2*4=8 quarters
money paid quarterly = 1300
Can you take it from here?
+118608 I am thinking
You could just do present value of an ordinary annuity
where
n=8-1=7
i=0.02
amount = 1300
And then when you get your present value just add $1300 onto it.
This is because that 1300 went into the bank and then was withdrawn immediately. so it can just be tacked on at the end of the problem.
