A current value of $50,000 is held in an account earning 12% APR. Equal payments are to be paid out quarterly until the account is depleted after 8 years. How much would the equal quarterly payments be under each of the following interest compounding scenarios? (Hint: first find the effective interest for each scenario to the nearest 10,000th of a percent. Then, find the value of the equal payments to the nearest $0.01.)

A. 12% APR Compounded Quarterly (4 quarters per year)

B. 12% APR Compounded Monthly (3 months per quarter)

C. 12% APR Compounded Daily (90 days per quarter)

D. 12% APR Compounded Continuously

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Solution A 12 APR Com... View the full answer