Question 866152: Hi, I need help on this problem: Determine the amount of the ordinary annuity at the end of the given period. (Round your final answer to two decimal places.)
$600 deposited quarterly at 6.2% for 8 years
I've already tried 3 times, my equation was A=600 x (1+0.062)^32-1 /0.062, and I got the answers $56657.80, 5981.28, 56657.79
Thank you!
Answer by DrBeeee(684)   (Show Source):
You can put this solution on YOUR website! I don't know what your -1/0.062 means, but your major mistake is not dividing the annual % rate of 0.062 by 4 to get the quarterly rate. The formula is
(1) B = P*(1+r/4)^(4*t) or
(2) B = 600*( 1+ 0.062/4)^(4*8) or
(3) B = 600*(1 + 0.0155)^32 or
(4) B = 600*(1.0155)^32 or
(5) B = 600*1.6359 or
(6) B = 981.54
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