SOLUTION: How much money should Jordan deposit into an account today, at 2.9% interest compounded quarterly, so that it will yield payments of $1000 at the end quarter for the next 8 years?

Algebra ->  Finance -> SOLUTION: How much money should Jordan deposit into an account today, at 2.9% interest compounded quarterly, so that it will yield payments of $1000 at the end quarter for the next 8 years?      Log On


   

Question 1149208: How much money should Jordan deposit into an account today, at 2.9% interest compounded quarterly, so that it will yield payments of $1000 at the end quarter for the next 8 years?
Found 2 solutions by josmiceli, MathTherapy:
Answer by josmiceli(19441) About Me  (Show Source):
You can put this solution on YOUR website!
+A+=+P%2A%28+1+%2B+r%2Fn+%29%5E%28+n%2At+%29+
+A+=+4%2A8%2A1000+
+A+=+32000+
----------------------
+r+=+.029+
+n+=+4+
+t+=+8+
----------------------
+32000+=+P%28+1+%2B+.029%2F4+%29%5E%28+4%2A8+%29+
+32000+=+P%2A1.00725%5E32%0D%0A%7B%7B%7B+32000+=+1.26006P+
+P+=+25395.52+
$25,395.52 should be deposited
------------------------------------
check:
+A+=+25395.52%2A%28+1+%2B+r%2Fn+%29%5E%28+n%2At+%29+
+A+=+P%2A1.00725%5E32+
+A+=+1.26006%2A25395.52+
+P+=+31999.88+
error due to rounding off
OK

Answer by MathTherapy(10552) About Me  (Show Source):
You can put this solution on YOUR website!
How much money should Jordan deposit into an account today, at 2.9% interest compounded quarterly, so that it will yield payments of $1000 at the end quarter for the next 8 years?
Correct amount to deposit, TODAY: highlight_green%28%22%2428%2C467.58%22%29

Use the formula: , where:   

To make it a LITTLE easier, you can calculate matrix%281%2C3%2C+i%2Fm%2C+%22=%22%2C+.029%2F4%29

The other person who responded KEEPS doing these problems the wrong way, and keeps giving wrong answers, ALL the time. 

With his answer: $25,395.52, quarterly payments will NEVER be $1,000. That amount will only provide $892.09 every quarter for 8 years.