Question

How much should Kaye set aside and invest in a fund earning 2% compound quarterly if she needs P75, 000 in 15 months?

Answer 1

question not clear about 2% per annum or quarter

If 2% is per annum:

investment is p

A = p(1+r)ⁿ

r = 2%/4 =0.5% per quarter

n = 15 months = 15/3= 5 quarters

75000 = p(1+0.005)⁵

p = 73152.8 /- is the amount that should be invested at 2% per year

if 2% is per quarter:

75000 = p(1.02)⁵

p= 67930/-