Question
Andy has set up an ordinary annuity to save for his retirement in 16 years. If his semi-annual payments are $250 and the annuity has an annual interest rate of 7.5%, what will be the value of the annuity when he retires?
How do I solve this equation?
What steps do I take to solve it?
Thank You!
How do I solve this equation?
What steps do I take to solve it?
Thank You!
Answers
don't you have a formula for the future value of an annuity?
250[(1+.075/2)^16-1]
=.8022278066/(.075/2)
=21.39274151
250(21.39274151)
=5348.18
So, would 5348.18 by the answer?
=.8022278066/(.075/2)
=21.39274151
250(21.39274151)
=5348.18
So, would 5348.18 by the answer?
good start, but 16 years means 32 payments.
Oh, okay
So, I would take 250[1+.075/2)^36-1
=.9517958171
.951795171(.07/4)
=50.76244358
650(50.76244358)
=32995.56 and this would be the answer?
So, I would take 250[1+.075/2)^36-1
=.9517958171
.951795171(.07/4)
=50.76244358
650(50.76244358)
=32995.56 and this would be the answer?
Oops, I entered it wrong.
I would take
250[1+.075/2)^3-1
the answer would be 14986.93?
I would take
250[1+.075/2)^3-1
the answer would be 14986.93?
Yes
Related Questions
James has set up an ordinary annuity to save for his retirement in 18 years. If his monthly payments...
James has set up an ordinary annuity to save for his retirement in 17 years. If his quarterly paymen...
James has set up an ordinary annuity to save for his retirement in 19 years. If his monthly payments...
James has set up an ordinary annuity to save for his retirement in 19 years. If his monthly payments...