document.write( "Question 1174589: You would like to have $41,000 in 5 years for the down payment on a new house following college
\n" ); document.write( "graduation by making deposits at the end of every three months in an annuity that pays 4.25%
\n" ); document.write( "compounded quarterly. How much should you deposit at the end of every three months? How
\n" ); document.write( "much of the $41,000 comes from deposits and how much comes from interest? \n" ); document.write( "
Algebra.Com's Answer #800013 by ikleyn(52788)\"\" \"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 = \"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 quartely 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 = $41,000;  r = 0.0425/4;  n = 5*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 = \"41000%2A%28%28%280.0425%2F4%29%29%2F%28%281%2B0.0425%2F4%29%5E%285%2A4%29-1%29%29%29\" = $1850.73.\r\n" );
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document.write( "In all. you deposit  5*4*1850.73 = 37014.60 dollars to the account.\r\n" );
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document.write( "The rest, the complement to $41,000,  41000 - 37014.60 = 3985.40 dollars is the interest.\r\n" );
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document.write( "Answer.  The necessary quartely deposit value is $1850.73.\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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