# Annuities

posted by Scott Ingraham

Victore French mad a deposit of 5000 at the end of ech quarter to book bank, which pays 8% intrest compounded quarterly. After 3 years, Victor made no more depostis. What will be the banance in the account 2 years after the last deposit. I have not a clue on how to figure this one out here. I don't know if i have to set up a time line again here or not. I am using a texas instruments calculator here to figure these out on that. HELP

1. Damon

It is a sinking fund for 3 years (12 payments of 2% each). Get the value of the sinking fund after the three years of deposits and interest payments.
Then it becomes a plain old compound interest deposit. After two years multiply the sinking fund mount by 1.02^8

2. tchrwill

Victore French mad a deposit of \$5000 at the end of each quarter to book bank, which pays 8% intrest compounded quarterly. After 3 years, Victor made no more deposits. What will be the balance in the account 2 years after the last deposit.

The 3 year accumulation is considered an Ordinary Annuity the final amount of which is derived from
S = R[(1+i)^n - 1]/i where S = the total accumulated sum, R = the periodic rent, or payment, n = the number of payments and i = the periodic interest = I/100(4).
Thus, S(12) = 5000[(1.02)^12 - 1]/.02.

The further growth of the final amount, S(12), 2 years after the last deposit derives from S = P(1+i)^n.

Therefore, S = S(12)(1.02)^8

3. Rickter

i meant the guys above sorry bout that.

4. Homie

Rickter is right the answer is 78574.78785
i got that by using 5000*13.4121 which gave me 67060.50 then 67060.50*1.1717= 78574.78785 whish is the answer.

1st you use amount of annuity chart and then you use sinking fund value.
The other guys are stupid. show the answers next time.

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