document.write( "Question 1148190: $960 is deposited at the end of every three months into an account that pays 5.1% compounded quarterly. How much interest will the investment earn over 4 years? \n" ); document.write( "

Algebra.Com's Answer #769549 by ikleyn(52790) $\"\"$ $\"About$

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document.write( "It is a classic Ordinary Annuity saving plan. The general formula is \r\n" );
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document.write( "    FV = ,    (1)\r\n" );
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document.write( "where  FV is the future value of the account;  P is your quarterly payment (deposit); r is the quarterly percentage yield presented as a decimal; \r\n" );
document.write( "n is the number of deposits (= the number of years multiplied by 4, in this case).\r\n" );
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document.write( "Under the given conditions, P = 960;  r = 0.051/4;  n = 4*4 = 16.  So, according to the formula (1), you get at the end of the 4-th year\r\n" );
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document.write( "    FV =  = $16919.93.\r\n" );
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document.write( "Note that you deposit only  4*4*$960 = $15360.  The difference \r\n" );
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document.write( "    16919.93 - 15360 = 1559.93 dollars\r\n" );
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document.write( "is the interest which the account earns/accumulates in 4 years.     ANSWER\r\n" );
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\n" ); document.write( "\n" ); document.write( "On Ordinary Annuity saving plans, see the lessons\r
\n" ); document.write( "\n" ); document.write( " - Ordinary Annuity saving plans and geometric progressions\r
\n" ); document.write( "\n" ); document.write( " - Solved problems on Ordinary Annuity saving plans\r
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\n" ); document.write( "\n" ); document.write( "The lessons contain EVERYTHING you need to know about this subject, in clear and compact form.\r
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\n" ); document.write( "\n" ); document.write( "When you learn from these lessons, you will be able to do similar calculations in semi-automatic mode.\r
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