Andrew is saving money and plans on making quarterly contributions into an account earning a quarterly interest rate of 0.875%. If Andrew would like to end up with $37,000 after 13 years, how much does he need to contribute to the account every quarter, to the nearest dollar? Use the following formula to determine your answer.
A= the future value of the account after n periods
d= the amount invested at the end of each period
i= the interest rate per period
n= the number of periods
A = d * ((1 + i)^n - 1) / i
37,000 = d * ((1 + 0.00875)^52 - 1) / 0.00875
37,000 = d * (1.00875^52 - 1) / 0.00875
37,000 = d * (1.529815025 - 1) / 0.00875
37,000 = d * 0.529815025 / 0.00875
37,000 = d * 60.55000571
d = 37,000 / 60.55000571
d ≈ $611
Therefore, Andrew needs to contribute approximately $611 every quarter to end up with $37,000 after 13 years.