Juan deposits $460 per quarter into his nest egg account. The account earns interest at the APR of 5.7% compounded quarterly. Right after Juan makes his 8th deposit, he loses his job and cannot make any deposits for the next 4 years (16 quarters). Eventually Juan gets another job and again begins making deposits to his account. Since he missed so many deposits while he was out of work, Juan now deposits $540 per quarter. His first $540 deposit comes exactly 16 quarters after his last $460 deposit. What will be Juan's account balance right after he has made his 40th $540 deposit?
Homework Answers
For such questions, always draw a timeline of cashflows for better understanding and then prepare the equation to calculate future value or present value as demanded by the question.
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