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Match all intervals
The fictional quote is 8% nominal annual compounded quarterly. Its periodic rate is 2%. Three years contain twelve quarterly payments. Each deposit occurs at the end of a quarter.
Count growth periods for the deposits
| Deposit date | Growth periods to time 12 |
|---|---|
| Time 1 | 11 |
| Time 6 | 6 |
| Time 12 | 0 |
Use the annuity factor
300×[(1.02¹² − 1)/0.02] gives 4,023.6269. Summing each deposit’s individually compounded value gives the same result. The last deposit is included without an extra growth period.
Keep contributions and earnings separate
The twelve deposits total 3,600. The difference between the model’s final value and 3,600 is the growth under its constant-rate assumptions. Fees, taxes and different crediting terms are not represented.