Asked by peace
determine the amount of each ordinary simple annuity. deposits of $2550 for 7 years at 9.7% per year compounded annually
Search instead for determine the amount of each ordinary simple annuity. deposits of $2550 for 7 years at 9.7% per year compounded annually.
B) Deposits of 1380 for 4 years at 10% per year compounded semi annually.
Search instead for determine the amount of each ordinary simple annuity. deposits of $2550 for 7 years at 9.7% per year compounded annually.
B) Deposits of 1380 for 4 years at 10% per year compounded semi annually.
Answers
Answered by
plumpycat
Since these are simple, ordinary annuities, the regular deposits happen at the same frequency as interest is applied, and we can use this formula:
FV = R [(1 + i)^n] / i
A)
FV = 2550 [(1 + 0.097)^7] / 0.097
FV = 2550 [1.097^7] / 0.097
FV = $ ______. __ (Round to 2 decimal places)
B) This question doesn't clearly state whether the $1380 regular deposits are semi-annually, to match when the interest is applied. If they are, you can use the above formula, remembering to adjust i and n accordingly (If not, it may be that you are expected to use a regular semi-annual deposit of $1380/2 = $690).
FV = R [(1 + i)^n] / i
A)
FV = 2550 [(1 + 0.097)^7] / 0.097
FV = 2550 [1.097^7] / 0.097
FV = $ ______. __ (Round to 2 decimal places)
B) This question doesn't clearly state whether the $1380 regular deposits are semi-annually, to match when the interest is applied. If they are, you can use the above formula, remembering to adjust i and n accordingly (If not, it may be that you are expected to use a regular semi-annual deposit of $1380/2 = $690).
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