Answer:
Quarterly deposit= $1,001.06
Explanation:
Giving the following information:
They anticipate they’ll need $150,000 in 18 years. The account pays 7.75% per year compounded quarterly.
To calculate the annual deposit, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
FV= 150,000
n= 18*4= 72
i= 0.075/4= 0.01875
A= (150,000*0.01875) / [(1.01875^72)-1]= $1,001.06
