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Miguel wants to save money to open a tutoring center. He buys an annuity with a quarterly payment of $39 that pays 3% interest, compounded quarterly. Payments will be made at the end of each quarter. Find the total value of the annuity in 8 years.Do not round any intermediate computations, and round your final answer to the nearest cent.

Respuesta :

Given

Quarterly payment = $39

Rate = 3%

Time = 8 years

Find

total value of the annuity in 8 years.

Explanation

Total value is given by

[tex]\begin{gathered} FV=39\frac{[1+\frac{0.03}{4}]^{4\times8}-1}{\frac{0.03}{4}} \\ FV=39\times\frac{0.2701112243174}{0.0075} \\ FV=1404.57836645\approx1404.6 \end{gathered}[/tex]

Final Answer

Therefore, the total value of the annuity in 8 years

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