a businesswoman wants to invest the same sum of money at th same of each quarter for 5 years.the investment will earn 8,5 percent interest per year,quarterly compounded. In order to have accumuated a total of R30000 at the of five years,what will the required quarterly investments be?
i = .085/4 = .02125
n = 20
amount = A = 30000
payment = P = ?
You must memorize the formulas
A = P( (1+i)^n - 1)/i
and
PV = P (1 - (1+i)^-n )/i, where PV is the present value
just sub in all your data and solve for the missing variable.
30000 = P( 1.02125^20 - 1).02125
30000 = P(24.602109..)
P = 1219.41