A series of equal quarterly deposits of 1,000 extends over aperiod of 3 years. I

Question

A series of equal quarterly deposits of 1,000 extends over aperiod of 3 years. It is desired to compute the futute worth ofthis quarterlt deposit series at 12% compounded monthly. Which ofthe following equations is correct? a. F= 4(1000)(F/A, 12%, 3) b. F= 1,000(F/A, 3%, 12) c. F= 1000(F/A, 1%, 12) d. F=1,000 (F/A, 3.03%, 12) A series of equal quarterly deposits of 1,000 extends over aperiod of 3 years. It is desired to compute the futute worth ofthis quarterlt deposit series at 12% compounded monthly. Which ofthe following equations is correct? a. F= 4(1000)(F/A, 12%, 3) b. F= 1,000(F/A, 3%, 12) c. F= 1000(F/A, 1%, 12) d. F=1,000 (F/A, 3.03%, 12)

Explanation / Answer

Equal quarterly Deposits(PMT)         = $1,000

Number ofyears                                = 3 years

Interestrate                                       = 12% (Compounded Monthly)

FVoA(1%,12)                                       = 12.68250

Future worth of your deposit amount = $1,000 * 12.68250

                                                           = $12,682.50

Thus, Option (c) F = 1000 (F/A, 1%, 12)

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