11. Kendall is saving $500 at the end of each month. How soon can she retire if she wants to have a retirement fund of $120 000.00 and interest is 5.4% compounded quarterly? $pm + = 500$ $EV = 126,000$ $cy = 4$
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4% = 0.054 $n$ = number of compounding periods per year = 4 (quarterly) $t$ = number of years The formula for future value of an ordinary annuity is: $FV = PMT \times \frac{[(1 + \frac{r}{n})^{nt} - 1]}{\frac{r}{n}}$ Since the payments are made monthly, we need Show more…
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