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A company want to buy new equipment in 2 years. The total cost will be $6,600. They want to put some funds into an interest drawing account that will compounded quarterly. If the company wants $6,600 in their account by the end of the year, please define the variables for the formula calculations This is exactly how the problem was worded

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Answer #1

Future value of equipment at end of the year (after 1 year) = F = $6,600

Annual interest rate = R [So, quarterly interest rate = R/4]

Number of years = N = 1 [So, number of quarters = 4N = 4]

Quarterly saving in fund = A.

Then the equation will be

F = A x [F/A{(R/4)%, 4N], or

$6,600 = A x [F/A{(R/4)%, 4]

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