Find the least amount that could be deposited in a bank account today at 12% compounded quarterly to allow $650 withdrawals at the end of each quarter for 10 years.
A) $15,024.60
B) $15,218.06
C) $28,308.73
D) $14,825.34

Question

Quizplus · Accepted Answer

The correct answer is A because the future value of the withdrawals is $650 * 4 * 10 = $26,000. The present value of this future value at 12% compounded quarterly is $26,000 / (1 + 0.12 / 4)^40 = $15,024.60.

Find the Least Amount That Could Be Deposited in a Bank