Question 15 5 pts Find the value of the annuity and the interest. Round to the nearest dollar. A = P[(1 + r)^t - 1] / r A = P [(1 + r/n)^(nt) - 1] / (r/n) P = A(r/n) / [(1 + r/n)^(nt) - 1] Periodic Deposit: $2500 at the end of every three months Rate: 4.5% compounded quarterly Time: 6 years $69,232; $9232 $65,209; $5209 $68,442; $8442 $290,665; $230,665
Added by Michael B.
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n = (6 years) * (4 quarters/year) = 24 quarters i = (4.5% per year) / (4 quarters/year) = 1.125% per quarter = 0.01125 Now, we can use the future value of an ordinary annuity formula: A = P * [(1 + i)^n - 1] / i A = $2500 * [(1 + 0.01125)^24 - 1] / 0.01125 A Show more…
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