document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1194023>Question 1194023</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Emmerson invests N$100,000.00 on a monthly basis, at the end of each month at an interest rate of 8.5% compounded quarterly.<BR>\n" );
document.write( "a) How much will he have after 3.5 years?<BR>\n" );
document.write( "b) How much interest does he earn on a monthly basis? (Hint: Calculate the monthly average. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #826155 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=826155\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> a key requirement is to get the interest rate per month.<BR>\n" );
document.write( "8.5% per year comounded quarterly = 8.5 divided by 4 = 2.125% per quarter.<BR>\n" );
document.write( "the growth factor per quarter is that divided by 100 and added to 1 to get 1.02125 per quarter.<BR>\n" );
document.write( "the growth factor per month is that raised to the 1/3 power to get 1.02125 ^ (1/3) = 1.007033744.<BR>\n" );
document.write( "subtract 1 from that and multiply it by 100 to .7033744% per month.<BR>\n" );
document.write( "use a financial calculator to find the future value of that for 3.5 years.<BR>\n" );
document.write( "inputs are:<BR>\n" );
document.write( "present value = 0<BR>\n" );
document.write( "number of months = 3.5 years * 12 = 42.<BR>\n" );
document.write( "interest rate per month = .7033744%<BR>\n" );
document.write( "payment amount = -100,000 at the end of each month<BR>\n" );
document.write( "solve for future value to get future value = 4,866,513.568.<BR>\n" );
document.write( "the total payments are 42 * 100,000 = 4,200,000<BR>\n" );
document.write( "the total interest is 4,866,513.568 minus 4,200,000 = 666,513.568.<BR>\n" );
document.write( "the average monthly interest is 666,513.568 / 42 = 15,869.37067.<BR>\n" );
document.write( "that's what i get.<BR>\n" );
document.write( "let me know if you have any questions or concerns.<BR>\n" );
document.write( "theo </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );