SOLUTION: A person wants to deposit $10,000 per year for 6 years. If interest is earned at the rate of 10 percent per year, compute the amount to which the deposits will grow by the end of t

Question 1173158: A person wants to deposit $10,000 per year for 6 years. If interest is earned at the rate of 10 percent per year, compute the amount to which the deposits will grow by the end of the 6 years if:
(a) Deposits of $10,000 are made at the end of each year with interest compounded annually.
(b) Deposits of $5,000 are made at the end of each 6-month period with interest compounded semiannually.
(c) Deposits of $2,500 are made at the end of every quarter with interest compounded

Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
a financial calculator will help find the solution for these problems.
the online calculator that i used is at https://arachnoid.com/finance/index.html

pv = present value
fv = future value
np = number of time periods.
pmt = payment amount in each time period.
ir = interest rate % per time period.
payment amount is at (beginning / end) of each time period.

problem 1:

pv = 0
np = 6 years
pmt = -10,000
ir = 10% per year.
click on fv to get:
fv = 77,156.10

problem 2:

pv = 0
np 6 years * 2 semi-annual time periods per year = 12 semi-annual time periods.
pmt = -5,000
ir = 10% per year / 2 = 5% per semi-annual time period.
click on fv to get:
fv = 79,585.63

problem 3:

pv = 0
np = 6 years * 4 quarters per year = 24 quarters.
pmt = -2,500
ir = 10% per year / 4 = 2.5% per quarter.
click on fv to get:
fv =80,872.59

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