SOLUTION: Find the future value for the following scenario, where m is the periodic deposit and r is the interest rate. Future Value: 225,000 r: 2.5% Compounded frequently: Quarterly, Ti

Algebra ->  Finance -> SOLUTION: Find the future value for the following scenario, where m is the periodic deposit and r is the interest rate. Future Value: 225,000 r: 2.5% Compounded frequently: Quarterly, Ti      Log On


   

Question 1183117: Find the future value for the following scenario, where m is the periodic deposit and r is the interest rate.
Future Value: 225,000 r: 2.5% Compounded frequently: Quarterly, Time in years: 10, Periodic deposit (m): ? , Interest earned: ?
Answer by Theo(13342) About Me  (Show Source):
You can put this solution on YOUR website!
use the financial calculator found at https://arachnoid.com/finance/index.html

payment at the end of each quarter is 4968.61.

total payments are 40 * 4968.61 = 198744.4.

interest earned is 225000 - 198744.4 = 26255.6

here is a display of the results from using the financial calculator.



inputs are everything except pmt.
output is pmt.

interest rate of 2.5% per year is divided by 4 to get interest rate of .625% per quarter.
number of years = 10 multiplied by 4 equals 40 quarters.
payments are made at the end of each quarter.
present value was set to 0.
future value was set to 225000.