Hello, Gracy!

Is someone assigning these problems without teaching you the necessary formula?

You need $10,000 in 8 years.

i) What amount should you deposit at the end of each quarter at 6% per annum,

compounded quarterly, so that you will have the required $10,000?

This is an Annuity problem, which has this formula: .

. . where: .

Solve for

You have: .

Hence: .

Therefore, you should deposit*each quarter.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

*Note that we roundup.

If we deposit each quarter,

. . the final amount will be only

ii) What quarterly deposit is required if the money earns 4% per annum,

compounded quarterly?

Use the same formula with: .