Cara needs $9,000 in 6 years. What amount can she deposit at the end of each quarter at 6% interest compounded quarterly so she will have her $9,000?

Question

Quizplus · Accepted Answer

To find the amount Cara needs to deposit each quarter, we use the future value of an ordinary annuity formula: FV = Pmt * [(1 + r)^nt - 1] / r. Here, FV = $9,000, r = 0.06/4 = 0.015, n = 4 quarters per year, t = 6 years. Solving for Pmt gives approximately $314.32.

Cara Needs $9,000 in 6 Years