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^n1)/(1.021)
= 150000*1.02^n + 3000(1.02^n1)/.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  Luis put $800 in his saving account whichs pays 6% annual interest How ...
 math  Jenna has $1500 in a savings account. She adds $30 to her account each ...
 Accounting  . Journalize the following transactions using the perpetual ...
 Finance  You are planning to save for retirement over the next 15 years. To do ...
 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 ...
 Economics  Luisâ€™s utility function is u=x^.4y^.6 Suppose that Luis wants to get...
 Math / Finance  You are planning to save for retirement over the next 15 years...
More Related Questions