What is the value of $600 per quarter for four years at the rate of 8% compounded quarterly?

1 Answer
Dec 12, 2016

Answer:

#T_(c=16)=$823.67# to 2 decimal places

Explanation:

#color(purple)("Assumption: The 8% is the annual rate.")#

There are 4 of these calculations per years so instead of using 8% at each calculation we use #(8%)/4# per calculation 4 times a years. Which is #=8/400#

Let #n# be the number of years
Let the count of calculations be #c=4n#

Let the principle sum be #P#
Let the Total in the account at count c be #T_c#

Then we have:

#T_c=P(1+8/400)^(4n)#
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You ask: #color(purple)("what is the value of $600 per quarter for 4 years")#

This implies an output of a list comprising of the progressive value of the $600 plus interest at each quarterly stage over the 4 years.

#color(purple)("Another assumption")#
Calculating for the total of compounded interest plus the principle sum #ul("after completion of 4 years.")#

#T_c=$600(1+8/400)^(16) = $823.6714....#

#T_(c=16)=$823.67# to 2 decimal places

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Built in Excel as a check
Tony B