Question

how much will you have in your account earning 6% p.y.c.d if you deposit $1,200
at the end of the first quarter and keep increasing the amount by 1% every quarter
over a five-year period?

Answer 1

	A/c balance after 5 years	P×[(1+r)^n-(1+g)^n]÷(r-g)
	Here,
1	Interest rate per annum	6.00%
2	Number of years	5
3	Number of compoundings per per annum	4
4 = 1÷3	Interest rate per period ( r)	1.50%
5 = 2×3	Number of periods (n)	20
	Growth rate (g)	1.00%
	First payment (P)	$                                                                       1,200
	A/c balance after 5 years	$                        30,399.59
		1200×((1+1.5%)^20-(1+1%)^20)÷(1.5%-1%)