A series of equal quarterly payments of 10000 for 15 years i

A series of equal quarterly payments of $10,000 for 15 years is equivalent to what future worth amount at an interest rate of 6% compounded at the given intervals? Quarterly Monthly Continuously

Solution

Answers:

Pn = Po x (1 + i)ⁿ

where;

Pn = future value

Po = original invested value

i = interest rate

n = years

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(a) Quarterly

n = 15 years x 4 = 60 quarters

i = 0.06/4 = 0.015 per quarter

So,

Pn = Po x (1 + i)ⁿ

= $ 10000 x (1 + 0.015)⁶⁰

= $ 24432.1977

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(b) Monthly

Pn = Po x (1 + i)ⁿ

= $ 10000 x (1 + 0.06/12)¹⁸⁰

= $ 24540.9356

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(c) Continuously

Pn = Po x (1 + i)ⁿ

= $ 10000 x (1 + 0.06)¹⁵

= $ 23965.5819

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