Beverly started a paper route on January 1, 1995. Every three months, she deposits $300 in her bank account, which earns 8 percent annually but is compounded quarterly. On December 31,1998, she used the entire balance in her bank account to invest in a certificate of deposit at 12 percent annually. How much will she have on December 31, 2001?© BrainMass Inc. brainmass.com February 24, 2021, 2:29 pm ad1c9bdddf
FVIF= Future Value Interest Factor
FVIFA= Future Value Interest Factor for an Annuity
FVIF( n, r%)= =(1+r%)^n
FVIFA( n, r%)= =[(1+r%)^n -1]/r%
We will have to calculate the Future Value (FV) of 300
deposited quarterly for ...
The solution calculates Future Value for annuity (quarterly compounding) which is again invested in a certificate of deposit (annual compounding).