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Stacy makes a $4,600 investment at the end of every year. Interest is 8% per year and is compounded quarterly. She makes a total
Stacy makes a $4,600 investment at the end of every year. Interest is 8% per year and is compounded quarterly. She makes a total of ten investments. Find the value of the investment immediately after the 10th investment. $71,395 $66,638 $76,661 $67,413 $48,928
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The problem youve provided is a compound interest problem involving periodic payments which can be solved using the future value of an annuity formula The formula takes into account regular investments or payments at the end of each period along with a compound interest rate The formula for the future value of an annuity compounded at different periods than payments are made is FV P times left frac1 rn 1r ight where FV is the future value of the annuity P is the payment amount per period r is the interest rate per period n is the total number of compounding periods Given that the interest rate is 8 per year and its compounded quarterly we have Annual interest rate i 8 008 Quarterly interest rate r i4 0084 002 since there are 4 quarters in a year Quarterly investments P 4600 Stacy invests at the end of each year which means each investment ...
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
13th Edition
978-0073379616, 73379611, 978-0697789938
