SOLUTION: Most scholarships are established by making a one time deposit into an account. The scholarship money is then taken from the earned
interest on the account at the end of each inve
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-> SOLUTION: Most scholarships are established by making a one time deposit into an account. The scholarship money is then taken from the earned
interest on the account at the end of each inve
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Question 1201535: Most scholarships are established by making a one time deposit into an account. The scholarship money is then taken from the earned
interest on the account at the end of each investment year. How much money should you deposit into an account earning an annual
interest rate of 3.833% compounded quarterly to establish an annual scholarship worth $1,500.00? Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website! 3.833% per year compounded quarterly is equal to .95825% per quarter.
the effective interest rate per year is (1.0095825)^4 -1) * 100 = 3.888447389% per year.
if you want the interest on that per year to be equal to 1500, then the principal will need to be equal to 38575.80802, rounded to the number of decimal places that are displayed.
that would be 1500 / .03888447389... = 38575.80802
the interest on that amount of money will be 1500 at the end of every year
the remaining balance at the end of each year will remain the same at 38575.80802.
