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Each quarter, the capital increases by a factor of (1 + 7.5/4), so in 32 quarters, the capital will increase by a factor of (1 + 7.5/4)^32. Calculate this factor, then divide the final amount by this factor.

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7y ago
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7y ago

Except that's 7.5 percent. Each quarter, the investment will increase by 1.01875

1.01875^32 is about 1.812

19000/1.812 is about $10485.65

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Q: In 8 years Pat wants to have 19000 available to buy a car. How much should he invest today if the interest rate is 7.5 percent compounded quarterly. Please show your work?
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