Arich uncle wants to make you a millionaire. how much money must he deposit in a trust fund paying 12% compounded quarterly at the time of your birth to yield $1,000,000 when you retire at age 60? (round your answer to the nearest cent.)

P=24.92 per quarter

Explanation:

this problem can be solved applying the concept of annuity, keep in mind that an annuity is a formula which allows you to calculate the future value of future payments affected by an interest rate.by definition the future value of an annuity is given by:

where is the future value of the annuity, is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid. so applying to this particular problem, we have:

we will asume that deposits are made as interest is compounded it is quarterly thats why we multiply 60 and 4 and also we divide 12% into 4, so:

solving P

P=24.92

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