Homework SourseJill opened an IRA with 600 and decided to put 600 into the
Jill opened an IRA with $600 and decided to put $600 into the account every 3 months at an annual rate of 6% compounded quarterly. What will be the balance in 30 years when Jill retires? (The answer is $198,772.91 but I don\'t know how to get that).
Jill opened an IRA with $600 and decided to put $600 into the account every 3 months at an annual rate of 6% compounded quarterly. What will be the balance in 30 years when Jill retires? (The answer is $198,772.91 but I don\'t know how to get that).
Solution
Amount after 30 years = Installment {( 1 + rate/4)^(n) - 1}/(rate/4)
rate = 6% compounded quarter;y = 0.06/4
n = 30 *4
= $600 { ( 1 + 0.06/4)^120/( 0.06/4) }
= 600{ 1.015^120-1}/( 0.015)
= 600(331.288)
= $ 198772.91
