document.write( "Question 1172747: Paul and Donna Kelsch are planning a Mediterranean cruise in 3 years and will need $9,500 for the trip. They decide to set up a \"sinking fund\" savings account for the vacation. They intend to make regular payments at the end of each 3 month period into the account that pays 6% interest compounded quarterly. What periodic sinking fund payment (in $) will allow them to achieve their vacation goal? (Round your answer to the nearest cent.) \n" ); document.write( "
Algebra.Com's Answer #797866 by ikleyn(52781)\"\" \"About 
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\n" ); document.write( "Paul and Donna Kelsch are planning a Mediterranean cruise in 3 years and will need $9,500 for the trip.
\n" ); document.write( "They decide to set up a \"sinking fund\" savings account for the vacation. They intend to make regular payments
\n" ); document.write( "at the end of each 3 month period into the account that pays 6% interest compounded quarterly.
\n" ); document.write( "What periodic sinking fund payment (in $) will allow them to achieve their vacation goal? (Round your answer to the nearest cent.)
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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 = \"P%2A%28%28%281%2Br%29%5En-1%29%2Fr%29\",    \r\n" );
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document.write( "where  FV is the future value of the account;  P is the quarterly payment (deposit); \r\n" );
document.write( "       r is the factual quarterly rate 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( "From this formula, you get for the monthly payment \r\n" );
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document.write( "    P = \"FV%2A%28r%2F%28%281%2Br%29%5En-1%29%29\".     (1)\r\n" );
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document.write( "Under the given conditions, FV = $9,500;  r = 0.06/4;  n = 3*4.  So, according to the formula (1), \r\n" );
document.write( "you get for the quarterly payment \r\n" );
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document.write( "    P = \"9500%2A%28%28%280.06%2F4%29%29%2F%28%281%2B0.06%2F4%29%5E%283%2A4%29-1%29%29%29\" = $728.46.\r\n" );
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document.write( "Answer.  The necessary quarterly deposit value is $728.46.\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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