Posted by **Terri** on Sunday, April 29, 2012 at 10:45pm.

Luis has $150,000 in his retirement account at his present company. Because he is assuming a position with another company, Luis is planning to "roll over" his assets to a new account. Luis also plans to put $3000/quarter into the new account until his retirement 20 years from now. If the new account earns interest at the rate of 8%/year compounded quarterly, how much will Luis have in his account at the time of his retirement?

- Math -
**Steve**, Monday, April 30, 2012 at 11:27am
assuming he adds 3000 at the beginning of each quarter, the account will have

1 quarter: 150000*1.02+3000*1.02

2 qtrs: 150000*1.02^2 + 3000*(1.02^2 + 1.02)

n qtrs: 150000*1.02^n + 3000(1.02 + 1.02^2 + ... + 1.02^n)

= 150000*1.02^n + 3000 (1.02^n-1)/(1.02-1)

= 150000*1.02^n + 3000(1.02^n-1)/.02

= 150000(1.02^n + 1.02^n - 1)

= 150000(2*1.02^n - 1)

so, after 20 years (80 quarters), he will have $1,312,631.75

- Math -
**Steve**, Monday, April 30, 2012 at 11:29am
Oops. the formula is

150000(1.02^n + 1.02^(n+1) - 1)

so $1,327,258.06

## Answer this Question

## Related Questions

- math - Jenna has $1500 in a savings account. She adds $30 to her account each ...
- Accounting - . Journalize the following transactions using the perpetual ...
- Geometry - Luis has a simple calculator that has buttons for the digits 0 ...
- Geometry - Luis has a simple calculator that has buttons for the digits 0 ...
- math - Luis and Berto sell TVs. Last month Berto sold 15 more TVs than Luis. ...
- Geometry - Luis has a simple calculator that has buttons for the digits 0 ...
- math - Luis put $800 in his saving account whichs pays 6% annual interest How ...
- accounting - A company was recently formed with $ 50,000 cash contributed to the...
- Finance - You are planning to save for retirement over the next 15 years. To do ...
- Science - Luis wanted to create a clay model of earth and the sun. To show how ...

More Related Questions