What is the value of $600 per quarter for four years at the rate of 8% compounded quarterly?

1 Answer
Tony B
Dec 12, 2016

T_(c=16)=$823.67 to 2 decimal places

Explanation:

color(purple)("Assumption: The 8% is the annual rate.")

There are 4 of these calculations per years so instead of using 8% at each calculation we use (8%)/4 per calculation 4 times a years. Which is =8/400

Let n be the number of years
Let the count of calculations be c=4n

Let the principle sum be P
Let the Total in the account at count c be T_c

Then we have:

T_c=P(1+8/400)^(4n)
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You ask: color(purple)("what is the value of $600 per quarter for 4 years")

This implies an output of a list comprising of the progressive value of the $600 plus interest at each quarterly stage over the 4 years.

color(purple)("Another assumption")
Calculating for the total of compounded interest plus the principle sum ul("after completion of 4 years.")

T_c=$600(1+8/400)^(16) = $823.6714....

T_(c=16)=$823.67 to 2 decimal places

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Built in Excel as a check
Tony BTony B

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