Question

What is the accumulated value of periodic deposits of $60 at the beginning of every quarter for 22 years if the interest rate is 2.24% compounded quarterly? Round to the nearest cent

Answer 1

To calculate the accumulated value of periodic deposits, you can use the formula A = P((1+r)^n-1)/r. Plugging in the given values, the accumulated value of the deposits after 22 years is approximately $12,607.73.

Step-by-step explanation:

To calculate the accumulated value of periodic deposits, we can use the formula:

A = P((1+r)^n-1)/r

Where:

• A is the accumulated value of the deposits
• P is the periodic deposit amount ($60)
• r is the interest rate per period (2.24% or 0.0224 divided by 4 for quarterly compounding)
• n is the number of periods (22 years multiplied by 4 for quarterly deposits)

Plugging in the values, we get:

A = 60((1+0.0224/4)^(22*4)-1)/(0.0224/4) ≈ $12,607.73

The accumulated value of the periodic deposits after 22 years is approximately $12,607.73.