Annuities: $250 dep. 1st of each qtr, 4.1% comp. qtrly

Sjolson

New member
Joined
Mar 10, 2008
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1
Good morning!

Got stuck on this one...

On the first of each quarter $250 is deposited in an account which pays 4.1% compounded quarterly. If the first payment was made on October 1, 2000 what will be the balance in the account on April 1, 2009?

Thanks!
 
Re: Annuities

Can you provide an example of one that does not stump you?

Are you wondering how to treat the interest rate?

Can you draw a cash flow map?

Do you know how to approach it from "Basic Principles"?

Let's see what you get.
 
On the first of each quarter $250 is deposited in an account which pays 4.1% compounded quarterly. If the first payment was made on October 1, 2000 what will be the balance in the account on April 1, 2009?

The annuity due formula is S = R[(1+i)^(n-1) -1]/i - R
S = the accumulated sum
R = the periodic deposit = $250
i = the decimal periodic interest = 4.1/100(4)
n = the number of interest bearing periods = 34
 
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