A family wants to have a $130,000 college fund for their children at the end of 16 years. What contribution must be made at the end of each quarter if their investment pays 7.2%, compounded quarterly?

(a) State whether the problem relates to an ordinary annuity or an annuity due.

ordinary annuity due

(b) Solve the problem. (Round your answer to the nearest cent.)

2

If $5500 is deposited at the end of each quarter in an account that earns 5% compounded quarterly, after how many quarters will the account contain $100,000? (Round your answer UP to the nearest quarter.) quarters