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Question 1194797: 6. A company plans to replace its computers in 4 years. It estimates it will cost $ 70000. To prepare for the expanse, the company invests quarterly in an account that pays 5.7 % interest compounded quarterly. What quarterly deposit should the company make to ensure it has $ 70000 in 4 years?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! i used the ti-ba-ii business analyst calculator.
inputs were:
pv = 0
fv = 70,000
number of time periods = 4 years * 4 quarters per year = 16 quarters.
interest rate per time period = 5.7% per year / 4 = 1.425% per quarter.
payments are made at the end of each time period.
output was pmt = 3926.15.
those are the deposits that need to be made at the end of each quarter.
total payments were 16 * 3926.15 = 62,818.4.
total interest earned was 70,000 - 62,818.4 = 7,181.6.
thee are not totally accurate because the intermediate results were rounded to the nearest penny.
the more detailed total payments were equal to 62,818.42.
the more detailed total interest earned was equal to 7,181.58
the total results are rounded to the nearest penny while the intermediate results are not for the more detailed analysis.
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