Question 1205676: How much should Janice deposit in an account paying 8% compounded quarterly in order to receive 1,250 every 3 months for the next 3 years?
Found 2 solutions by Theo, ikleyn:
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! use the calculator at https://arachnoid.com/finance/ to solve this problem.
inputs are:
present value = 0
future value = 0
number of time periods = 3 year * 4 periods per year = 12 quarters of a year.
interest rate per time period = 8% per year / 4 = 2% per quarter.
payments are made at the end of each time period.
solve for present value to get present value = 13,219.18.
that's how much she needs to invest.
here are the results.
Answer by ikleyn(52785)  (Show Source):
You can put this solution on YOUR website! .
How much should Janice deposit in an account paying 8% compounded quarterly
in order to receive 1,250 every 3 months for the next 3 years?
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This problem in the post is posed INCORRECTLY.
To be correct, the problem must say explicitly, when the withdrawals are made:
at the end or at the beginning of each quarter.
Depending on this condition, the solution uses different methodologies and leads to totally different answers.
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I noticed that approximately the entire last year the problems like this one,
related to annuities or leaky funds, all arrive in incorrect formulations.
Many times I reacted on it by writing my notices, but, looks like it does not help.
It means that
(1) the local Math composer is not familiar with the subject;
(2) ignores directions of experts;
(3) and/or copy-paste from an untrusty source without thinking and without understanding.
I recommend to the managers of this forum/project to explain to this
local Math composer the perniciousness of his activity at this forum.
Or simply remove this person from his duties at this forum
for his inability to formulate the problems correctly
and to replace him by more competent individual.
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