Two mistakes in my tutorial sheet?
I don't get the answers on the sheet. but I think I am right
13. A man purchases a car on January 1, 1979 by paying a deposit of $3000 and agreeing to pay $500 every 3 months for the next 5 years. Interest is included at the rate of 10% p.a. payable quarterly. He makes no payments at all until April 1, 1980 at which time under pressure of repossession he agrees to fulfil his obligations by regular quarterly payments for the rest of the 5 year period starting immediately. What should the payments be?
14. A couple pays a total of $1,000 yearly into an investment fund for their children’s education. The fund pays 8% pa compounded quarterly. How much will be in the fund after 18 years?
Answers on the sheet
13. $659.04; 14. $38,347.58
13) everything happens 4 quarters later than it should so the 500 payments become 500*(1.025)^4= 551.9064453
14) 1000* (( 1.02)^4)^18-1)/(1.02^4-1)=38,348.39