What is the future value of $1,250 deposited at the end of each quarter for 10 years earning 9% interest?

To calculate the future value of $1,250 deposited at the end of each quarter for 10 years with an interest rate of 9% annually, we can use the formula for the future value of an ordinary annuity. An ordinary annuity is a series of equal payments made at the end of each period.

The formula for future value (FV) of an ordinary annuity is:

[ FV = P \times \frac{(1 + r)^n - 1}{r} ]

Where:

• ( P ) is the payment made each period ($1,250 in this case).
• ( r ) is the interest rate per period (annual rate divided by the number of periods per year).
• ( n ) is the total number of payments (number of years multiplied by the number of periods per year).

In this case:

• The annual interest rate is 9%, which means the quarterly interest rate is ( 0.09 / 4 = 0.0225 ).
• The total number of deposits is ( 10 \times 4 = 40 ).

Using these values, we can substitute them into the formula:

1. Calculate ( r ): ( r = 0