Question

Your company must make a $500,000 balloon payment on a lease 2 years and 9 months from today. You have been directed to deposit an amount of money quarterly, beginning today, to provide for the $500,000 payment. The account pays 4% per year, compounded quarterly. What is the required quarterly deposit

Answer 1

Answer:

The Required quarterly deposit is $42,196

Explanation:

The computation of the required quarterly deposit is shown below:

P for (now - 1)

= $500,000 (P/F, 1%, 12)

= $500,000 (0.8874)    

= $443,700

A  = Pnow-1 (A/P, 1%, 11)

= $443,700 (0.0951)              

= $42,196

hence, The Required quarterly deposit is $42,196

The same is to be considered as it is relevant