document.write( "Question 1198726: Jimmy wants to save $2000 in 3 years for a down payment on a motorcycle. If he can earn 4% compounded quarterly, how much will he need to deposit each quarter in order to save this amount? \n" ); document.write( "
Algebra.Com's Answer #832382 by ikleyn(52784)\"\" \"About 
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\n" ); document.write( "Jimmy wants to save $2000 in 3 years for a down payment on a motorcycle.
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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 effective 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 quarterly 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 = $2,000;  r = 0.04/4 = 0.01;  n = 3*4 = 12.  \r\n" );
document.write( "So, according to the formula (1), you get for the quarterly payment \r\n" );
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document.write( "    P = \"2000%2A%280.01%2F%281.01%5E12-1%29%29\" = $157.70.\r\n" );
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document.write( "Answer.  The necessary quartely deposit is $157.70.\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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