Rodney Cashman has been investing $2,000 quarterly for the past 18 years in an equity mutual fund. How much is the fund worth now assuming he has earned 11.5% compounded quarterly on his investment?

Question

Business

Levi Mccall

3 December, 00:03

Rodney Cashman has been investing $2,000 quarterly for the past 18 years in an equity mutual fund. How much is the fund worth now assuming he has earned 11.5% compounded quarterly on his investment?

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Answers (1)

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Matthias Ramos · Answer 1

Rodney Cashman's fund is worth $ 465,862.95 after investing for the past 18 years.

Explanation:

Given: Number of periods - 18 years * 4 quarters = 72

Periodic payment - $2,000

Interest Rate - 11.5%

Formula: FV of Annuity = p [ (1 + r/m) n-1 / (r/m) ]

Where:

P - Periodic Payment

r - interest rate

n - number of periods

m - compounding period

FV of Annuity = $ 465,862.95