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## How much must be deposited into an account that pays 12.2% annual interest compounded quarterly to receive $13,422 after 5 years.

Question

How much must be deposited into an account that pays 12.2% annual interest compounded quarterly to receive $13,422 after 5 years.

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Mathematics
2 months
2021-07-22T19:15:02+00:00
2021-07-22T19:15:02+00:00 1 Answers
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## Answers ( )

Answer:$7,359.65Step-by-step explanation:The computation of the amount that to be deposited is shown below:

Here we have to calculate the present value

As we know that

Present value = future value ÷(1+ rate of interest)^yearswhere,

rate of interest = 12.2% ÷ 4 = 3.05%

And, the years is = 5 × 4 = 20

Now the present value is

= $13,422 ÷ (1+ 3.05%)^20

=

$7,359.65