Posted by **ughh help** on Saturday, April 30, 2011 at 11:37pm.

If $86,000 is invested in an annuity that earns 5.2%, compounded quarterly, what payments will it provide at the end of each quarter for the next 3½ years?

- math -
**MathMate**, Sunday, May 1, 2011 at 6:38am
Principal, P = $86000

Compounding period : quarterly

interest, i = 5.2%/4 = 1.3% = 0.013

Number of periods, n = 3.5*4 = 14

R = payment per quarter

P = R(1-(1+i)^(-n))/i, or

R = Pi/(1-(1+i)^(-n))

=$86000*0.013/(1-1/(1.013)^14)

=$86000*(0.0785876)

=$6758.54

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