In: Finance
Determine the accumulated value of quarterly deposits which grow by $18 each quarter for 12 years, with a first payment of $310 one quarter from now, if the deposits earn 1.3%/year compounded quarterly.
The stream of deposits contain two parts:
(a) The uniform fixed amount of $310 every quarter
(b) Arithmetic gradient of $18 every quarter
Uniform series payment in lieu of the gradient is $411.80 calculated as follows:
Total uniform series deposits per quarter= $310 + $411.80 = $721.80
Amount accumulated over 12 years period is the Future Value of annuity comprising of this total uniform series deposits. The value is $37,429.35 calculated as follows: