Answer:
The answer is $103,080.32
Explanation:
To calculate this , the formula for a sinking fund, compounded periodically is applied and the formula is stated as follows:
[tex]FV=PMT\frac{(1+\frac{r}{n} )^{n*t}}{\frac{r}{n}}-1[/tex]
where:
FV = future value
PMT = periodic payment = $500
r = interest rate = 2.02% = 0.0202
n = number of compounding periods per year = quarterly = 4
t = period of investment in years = 2 years
[tex]FV=500\frac{(1+\frac{0.0202}{4} )^{4*2}}{\frac{0.0202}{4}}-1[/tex]
[tex]=500\frac{(1.00505)^8}{0.00505} -1\\= 500(206.162639)-1[/tex]
= $103,080.32
