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James Henderson deposited $19,000 in a money market certificate that provides interest of 8% compounded quarterly...

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Accounting

James Henderson deposited $19,000 in a money market certificatethat provides interest of 8% compounded quarterly if the amount ismaintained for 3 years. How much will Cindy Henry have at the endof 3 years? (Round factor values to 5 decimal places,e.g. 1.25124. Round answers to the nearest whole dollar, e.g.5,250.)

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4.4 Ratings (878 Votes)

Annual rate of interest is 8% ; interest compounded Quarterly
So Quarterly interest Rate = 8% /4 Quarters = 2%
Quarters FVF of $ 1 @ 2%
0                                   1.00000
1                                   1.02000
2                                   1.04040
3                                   1.06121
4                                   1.08243
5                                   1.10408
6                                   1.12616
7                                   1.14869
8                                   1.17166
9                                   1.19509
10                                   1.21899
11                                   1.24337
12                                   1.26824
Deposite Amount PVF @ 9% in Eighth Year Future Value
Future Value = $                           19,000.00                          1.26824 $                        24,097
Answer = $ 19,000 wil become $ 24,097 in three @ 8% compounded Quarterly

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