## Jonathon saves $4,000 at the end of each quarter for 10 years. Assume 12% compounded quarterly and find the present value. A.$35,008.

Question

Jonathon saves $4,000 at the end of each quarter for 10 years. Assume 12% compounded quarterly and find the present value. A.$35,008.24
B. $92,459.08 C.$105,623.10
D. $88,459.08 Kaitlyn hopes to attend a college where tuition is$24,000 per year. She believes that tuition will increase at 4% for the 3 years until she plans to enter college. Find the quarterly payments needed to accumulate funds to pay the first year’s tuition if funds earn 8% compounded quarterly.
A. $1,597.20 B.$34.05
C. $2,012.87 D.$2,561.30

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3 months 2021-08-17T01:51:14+00:00 1 Answers 3 views 0

Results are below.

Step-by-step explanation:

1. First, we need to calculate the Future Value:

FV= {A*[(1+i)^n-1]}/i

A= quarterly deposit

n= 10*4= 40

i= 0.12/4= 0.03

FV= {4,000*[(1.03^40) – 1]} / 0.03

FV= $301,605.04 Now, the present value: PV= FV/(1+i)^N PV= 301,605.04/(1.03^40) PV=$92,459.09

2. First, we need to calculate the value of the first year of college:

FV= PV*(1+i)^n

FV= 24,000*(1.04^3)

FV= $26,996.74 Now, the quarterly payments: FV= {A*[(1+i)^n-1]}/i A= quarterly deposit Isolating A: A= (FV*i)/{[(1+i)^n]-1} i= 0.08/4= 0.02 n= 3*4= 12 A= (26,996.74*0.02) / [(1.02^12) – 1] A=$2,012.87