Solve the problem.
-Find the least amount that could be deposited in a bank account today at $12 \%$ compounded quarterly to allow $\$ 650$ withdrawals at the end of each quarter for 6 years?
A) $\$ 32,325.23$
B) $\$ 11,318.55$
C) $\$ 11,008.10$
D) $\$ 10,688.35$

Question

Quizplus · Accepted Answer

To find the least amount to deposit, we use the present value of an annuity formula: $ PV = PMT \times \left(1 - (1 + r)^{-n}\right) / r $, where $ PMT = 650 $, $ r = 0.12/4 = 0.03 $, and $ n = 6 \times 4 = 24 $. Calculating gives $ PV \approx 11,008.10 $.

Solve the Problem 12%12 \%12% Compounded Quarterly to Allow $650\$ 650$650 Withdrawals at the End of Each Quarter for 6 Years

Solve the Problem $12 \%$ Compounded Quarterly to Allow $\$ 650$ Withdrawals at the End of Each Quarter for 6 Years