Final answer:
To reach [tex]$800,000 in 35 years with a 7% interest rate compounded quarterly, calculate the quarterly investment needed, total money put into the account, and total interest earned.
Explanation:
a) How much should you deposit each quarter?
To calculate how much to invest each quarter to reach $[/tex]800,000 in 35 years at an interest rate of 7% compounded quarterly, you can use the formula for compound interest:
PV = rac{FV}{(1 + r/n)^{nt}}
In this case, PV (present value) is what you need to solve for, FV (future value) is $800,000, r is 7% or 0.07, n is 4 (quarters per year), and t is 35 years.
b) How much total money will you put into the account?
To find the total money you will invest, you multiply the quarterly investment amount by the total number of quarters over 35 years.
c) How much total interest will you earn?
The total interest earned can be calculated by subtracting the total amount you invested from the total future value.
Learn more about Compound interest calculations here:
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