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Question 1061643: you would like to have $800,000 when you retire in 35 years. How much should you invest each quarter if you can earn a rate of 6.7% compounded quarterly?
a) How much should you deposit each quarter?
b) How much total money will you put into the account?
c) How much total interest will you earn?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! you want 800,000 when you retire in 35 years.
your interest rate is 6.7% compounded quarterly.
the number of time periods you would be depositing money would be 35 * 4 = 140 quarters.
your interest rate percent per time period would be 6.7 / 4 = 1.675% per quarter.
a.
you would have to deposit 1451.381206 each quarter.
b.
the total amount of money you would put into the account would be 1451.381206 * 140 = 203,193.3688
c.
the total interest you would have earned would be 800,000 - 203,193.3688 = 596,806.6312
i used a texas instruments BA II plus calculator to solve this.
there are formulas that can be used as well, as well as an online time value of money calculator.
both can be found in this tutorial.
https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes
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