Exam 23: Understanding Time Value of Money Formulas and Concepts

Currently on January 1, 2017), Nolan wants to have $45,000 available on December 31 2022 to purchase a luxury car. To be able to have this amount available, Nolan will make equal quarterly deposits for the next six years in an investment account earning a 16% annual return compounded quarterly. Nolan will make these deposits at the end of March, June, September, and December. What is the amount to be deposited quarterly for the next six years that will provide for a $45,000 balance at the end of 2022?

Anne wants to accumulate $25,000 by December 31, 2019. To accumulate that sum, she will make twelve equal quarterly deposits of $1,616.66 at the end of March, June, September, and December, beginning on March 31, 2016, into a fund that earns interest compounded quarterly. What annual rate of interest must the fund provide to yield the desired sum?