Karley's setting aside $32,000 each quarter, starting today, for the next three years for an expansion project. How much money will the firm have at the end of the three years if it can earn an average of 5.45 percent on its savings

Question

Beckham Neal

Business

15 September, 10:11

Karley's setting aside $32,000 each quarter, starting today, for the next three years for an expansion project. How much money will the firm have at the end of the three years if it can earn an average of 5.45 percent on its savings

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Answers (1)

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Peyton Garza · Answer 1

Final Value = $414,135.43

Explanation:

Giving the following information:

Quarterly deposit = $32,000

Number of quarters = 3*4 = 12

Interest rate = 0.0545/4 = 0.01363

To calculate the final value, we need to use the following formula:

FV = {A*[ (1+i) ^n-1]}/i

A = quarterly deposit

FV = {32,000*[ (1.01363^12) - 1]} / 0.01363

FV = $414,135.43