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Mr. Chang wants to retire in 10 years. He deposits $650.00 every three months into his retirement investment account. If the account's interest rate is 7.8% compounded quarterly, how much will he have at the end of 5 years, when 20 quarterly deposits of $650.00 have been made?

Give answer in US dollars and cents rounded to the nearest cent (do NOT enter "$" sign)

Respuesta :

Answer:

Mr. Chang will have 15714.90 dollars.

Step-by-step explanation:

p = 650

r = [tex]7.8/4/100=0.0195[/tex]

Number of periods or n = [tex]5\times4=20[/tex]

Future value formula is : [tex]p[\frac{(1+r)^{n}-1}{r} ][/tex]

Putting the values in formula we get;

[tex]650[\frac{(1+0.0195)^{20}-1}{0.0195} ][/tex]

= $15714.90

Hence, Mr. Chang will have 15714.90 dollars.