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Interest and Periodic Payments

The future value of an annuity is A=$32,000. Periodic payments are made quarterly for four years and the annuity earns 8% compounded quarterly. Find the periodic payments.

A. $422.40
B. $1,716.80
C. $2000.00
D. $2,160.00

Solution Preview

If the nominal interest rate is 8%, the quarterly interest rate is 8/4 % = 2%. Recall, the future ...

Solution Summary

Periodic payments are calculated given compound interest. The solution is detailed and well presented. The response received a rating of "5/5" from the student who originally posted the question.