Future Value of an Annuity

[cruz52]

If $500 is deposited each quarter into an account paying 8% compounded quarterly for 3 years, find the interest earned during each of the 3 years.

I know the formula FV=PMT (1+ i)^n - 1 /i has to be used

PMT - 500
i = .02
n = 12

I would know how to solve this, but I am not sure how to do it for each of the three years. If N=12 would I first solve for N using 4, 8, than 12? And how would I just find the interest itself, instead of the total FV? What would I need to subtract?

 

[cruz52]

So if for the first year you use 4 .. I did this ... 500(1.02)^4 - 1/ .02 = $ 2060.804 .... does that count as the first years interest or the FV ?? How would I just find the interest itself.

 

[Denis]

So if for the first year you use 4 .. I did this ... 500(1.02)^4 - 1/ .02 = $ 2060.804 .... does that count as the first years interest or the FV ?? How would I just find the interest itself.

Since $2000 was deposited and you end up with 2060.80, then 60.80 is the interest; IT IS that simple.