1. Suppose that you open a term deposit account that allows the flexi- bility of additional deposits. The account pays 3.8% p.a. compounded quarterly, with a term of 2 years (8 quarters). (a) An initial deposit of $2,000 is needed to open the account. How much is this worth at the end of the 2 year term? (Give your answer correct to the nearest cent.) (b) Suppose you decide to make additional regular quarterly deposits of $250 into the account, starting at the end of the first quarter, with the last payment at the end of term. i. How many payments are made, and what is the total of the payments? ii. What is the future value of the payments at the end of the term? (Give your answer correct to the nearest cent.) (c) What regular payment at the end of each quarter would be needed so that the final balance at the end of the term (which includes the value of the initial deposit) is $5,000? (Give your answer correct to the nearest cent.) (d) Approximately how long of a term would be needed to reach a final balance of $5,000 with the original regular payments of $250 at the end of every quarter?
1. Suppose that you open a term deposit account that allows the flexi- bility of additional deposits. The account pays 3.8% p.a. compounded quarterly, with a term of 2 years (8 quarters). (a) An initial deposit of $2,000 is needed to open the account. How much is this worth at the end of the 2 year term? (Give your answer correct to the nearest cent.) (b) Suppose you decide to make additional regular quarterly deposits of $250 into the account, starting at the end of the first quarter, with the last payment at the end of term. i. How many payments are made, and what is the total of the payments? ii. What is the future value of the payments at the end of the term? (Give your answer correct to the nearest cent.) (c) What regular payment at the end of each quarter would be needed so that the final balance at the end of the term (which includes the value of the initial deposit) is $5,000? (Give your answer correct to the nearest cent.) (d) Approximately how long of a term would be needed to reach a final balance of $5,000 with the original regular payments of $250 at the end of every quarter?
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:1. Suppose that you open a term deposit account that allows the flexi-
bility of additional deposits. The account pays 3.8% p.a. compounded
quarterly, with a term of 2 years (8 quarters).
(a) An initial deposit of $2,000 is needed to open the account. How
much is this worth at the end of the 2 year term? (Give your
answer correct to the nearest cent.)
(b) Suppose you decide to make additional regular quarterly deposits
of $250 into the account, starting at the end of the first quarter,
with the last payment at the end of term.
i. How many payments are made, and what is the total of the
payments?
ii. What is the future value of the payments at the end of the
term? (Give your answer correct to the nearest cent.)
(c) What regular payment at the end of each quarter would be needed
so that the final balance at the end of the term (which includes
the value of the initial deposit) is $5,000? (Give your answer
correct to the nearest cent.)
(d) Approximately how long of a term would be needed to reach a
final balance of $5,000 with the original regular payments of $250
at the end of every quarter?
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