Tammy wishes to purchase a new laptop in 4 years. She makes quarterly deposits of $130 into an account that pays 4% per year compounded quarterly for 4 years. How much will she have towards the purchase of a new laptop in 4 years?

FV = $2,243.52

Explanation:

Giving the following information:

Number of periods = 4*4 = 16

Quarterly deposit = $130

Interest rate = 4%

First, we need to calculate the quarterly interest rate:

Interest rate = 0.04/4 = 0.01

Now, using the following formula, we can calculate the final value:

FV = {A*[ (1+i) ^n-1]}/i

A = annual deposit

FV = {130*[ (1.01^16) - 1]} / 0.01

FV = $2,243.52