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    Compound interest

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    How long will it take to save $4500 for a down payment on a new car if you make deposits of $250 every 3 months into account yielding 5.3% compounding quarterly?

    © BrainMass Inc. brainmass.com June 3, 2020, 10:10 pm ad1c9bdddf

    Solution Preview

    Let's check your balance P after every quarter (3 months). Here is the table. The quarterly rate is r = 5.3%/4 = 0.01325

    Quarter Balance
    1 ...

    Solution Summary

    This provides an example of working with compound interest to determine how long it will take to save money.