If deposits of $9,900 invested at the end of every six months earn 13% compounded quarterly, how long will it take to accumulate $295,000?

Question

Quizplus · Accepted Answer

The correct answer is found by using the formula for the future value of a series of annuities compounded at a different frequency than the payments are made. The formula is complex and typically requires financial calculators or spreadsheet software to solve. Given the interest rate is compounded quarterly but payments are made semi-annually, adjustments in the formula account for the difference in compounding periods and payment periods. By inputting the given values (deposit amount, interest rate, and goal amount) into the formula or a financial calculator, it can be determined that it takes 8.5 years to accumulate $295,000. This is a simplified explanation; the exact calculation involves understanding the relationship between the compounding period and the payment period, and how it affects the accumulation of interest over time.

If Deposits of $9,900 Invested at the End of Every