Your grandfather started his own business 52 years ago. He opened an investment account at the end of his third month of business and contributed $x. Every three months since then, he faithfully saved another $x. His savings account has earned an average rate of 5.73 percent annually. Today, his account is valued at $289,209.11. How much did your grandfather save every three months assuming he saved the same amount each time?

If my grandfather was saving every three months, the amount he saved each time is $226.78.

Given Information

Future Value = $289,209.11

Annual interest rate = 5.73%

Quarters rate of interest = 5.73/4

Quarters rate of interest = 0.0143

Number of periods = 52 years * 4

Number of periods = 208

PMT = FV / ((1+ i)^n - 1) / i

PMT = $289,209.11 /{ (1+0.014325)^208 -1) / 0.014325}

PMT =$289,209.11 / 1,275.27

PMT = $226.78

In conclusion, If my grandfather was saving every three months, the amount he saved each time is $226.78.

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Solution:

Given ,

Grandfather started his own business 52 years ago

Average rate = 5.73

His account is valued at $289,209.11

Now , Calculate How much did your grandfather save every three months assuming he saved the same amount each time

N = 52 *4 = 208

I = 5.73/4 = 1.43

PV = 0

FV = $289,209.11

CPT PMT = $-443.13 ( Using excel )

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