A company is planning to make equal quarterly deposits into a bank account. They want their...

A company is planning to make equal quarterly deposits into a bank account. They want their
account to have 1.5 million dollars after 5 years from now because they want to buy a certain
machine. Note that the first quarterly deposit is made today and the last deposit is made at
the end of year 5.
A) If the bank’s interest rate is 14% per year compounded monthly, how much should the
company deposit each quarter? (12.5 points)
B) If the bank’s interest rate is still 14% per year but compounded continuously, how much
should the company deposit each quarter? (12.5 points)

Expert Solution

Part (A)

Part (B)

interest rate is 14% per year compounded continuously

Rahul Sunny answered 2 years ago

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