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frutty [35]
3 years ago
11

Lucy recieves a gift of a twenty-one year annuity on the day she was born. The annuity pays $500 on her odd birthday and $700 on

even birthday. If the nominal rate of interest is 8% payable monthly, find the value of this annuity on the day she was born. Answer: $5,817.13
A Few things have me stuck. If the year of her birth time 0 is odd or even. Also, I understand I need to consider the interest for 2 years but how to get my monthly nominal to a two year rate. I just did 8% times 2.
Mathematics
1 answer:
suter [353]3 years ago
3 0

Explanation:

Let i represent the nominal annual interest rate (8%). Then the effective annual multiplier of the principal is ...

  (1 +i/12)^12 = (1+.08/12)^12 ≈ 1.0829995

Then the 2-year multiplier is the square of this:

  1+r = (1.0829995)² = 1.1728879

We can use the formula for the present value of an annuity to refer all of the odd-birthday payments to 1 year prior to birth, then adjust by the above annual multiplier. All the even-birthday payments will have the formula applied in the usual way.

  PV = P(1 -(1+r)^-n)/r

where P is the payment amount, (1+r) is the periodic multiplier, and n is the number of payments.

For the odd-birthday payments, the PV (1 year early) is ...

  PV = $500(1 -(1.1728879)^-11/0.1728879 = $2391.5704

so, the amount referred to the day of birth is ...

  1.0829995 × $2391.5704 = $2590.07 . . . . . PV of odd-birthday payments

__

The value of even-birthday payments is ...

  PV = $700(1 -(1.1728879)^-10/0.1728879 = $3227.06

And the total value of both sets of payments is ...

  annuity value = $2590.07 +2337.06 = $5817.13

_____

<em>Alternate solution</em>

You could also work this using the PV formula on the sum of ten sets of two years' payments: (700 +500/1.083) and then add the PV of the first odd-year birthday payment: 500/1.083.

This gives ...

  500/1.083 + (700 +500/1.083)(1 -(1.1729^-10))/0.1729 = 5817.13

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Work out the area of a rectangle with base, b = 36mm and perimeter, P = 94mm.​
Alenkasestr [34]

Answer:

396

Step-by-step explanation:

A = bw

A = 36w

P = 2w + 2b

94 = 2w + 2(36)

94 = 2w + 72

-72           -72

--------------------

22 = 2w

----    ----

2       2

11 = w

A = 36(11)

A = 396

The area of the rectangle will be 396.

7 0
3 years ago
Sharon Bernstein rents an apartment for $1,110 a month. She has these annual expenses: electricity, $980; gas, $1,100; phone/cab
sweet-ann [11.9K]

Answer:

Annual expenses INCLUDING cost of annual rent: = $17,597

Annual expenses EXCLUDING cost of annual rent: = $4,277

Step-by-step explanation:

Annual expenses EXCLUDING cost of annual rent:

Electricity = $980

Gas = $1,100 Phone/cable/Internet = $2,100

Insurance = $45

Lost interest = $52

Total = $980 + $1,100 + $2,100 + $45 + $52

= $4,277

Annual expenses EXCLUDING cost of annual rent: = $4,277

Annual expenses INCLUDING cost of annual rent:

Rent = $1,110 per month

Annual rent = $1,110 per month × 12

= $13,320

Electricity = $980

Gas = $1,100 Phone/cable/Internet = $2,100

Insurance = $45

Lost interest = $52

Total = $13,320 + $980 + $1,100 + $2,100 + $45 + $52

= $17,597

Annual expenses INCLUDING cost of annual rent: = $17,597

5 0
3 years ago
A store sold 200 cell phone covers in April. The circle graph shows the
Brilliant_brown [7]

Answer:

24

Step-by-step explanation:

Given

Total is 200

From the attachment, we have:

Required

Black- 35%

Blue-23%

How many more of black than blue were sold

First, calculate the difference in percentage sold

Multiply by the total phones sold;

Hence, 24 more blacks were sold than blue

Hope this helps

Brainliest appreciated :)

6 0
2 years ago
Read 2 more answers
PLEASE HELP ME!
algol13

Step-by-step explanation:

1.\sum_{i=1}^{5}3i

The simplest method is "brute force".  Calculate each term and add them up.

∑ = 3(1) + 3(2) + 3(3) + 3(4) + 3(5)

∑ = 3 + 6 + 9 + 12 + 15

∑ = 45

2.\sum_{k=1}^{4}(2k)^{2}

∑ = (2×1)² + (2×2)² + (2×3)² + (2×4)²

∑ = 4 + 16 + 36 + 64

∑ = 120

3.\sum_{k=3}^{6}(2k-10)

∑ = (2×3−10) + (2×4−10) + (2×5−10) + (2×6−10)

∑ = -4 + -2 + 0 + 2

∑ = -4

4. 1 + 1/4 + 1/16 + 1/64 + 1/256

This is a geometric sequence where the first term is 1 and the common ratio is 1/4.  The nth term is:

a = 1 (1/4)ⁿ⁻¹

So the series is:

\sum_{j=1}^{7}(\frac{1}{4})^{j-1}

5. -5 + -1 + 3 + 7 + 11

This is an arithmetic sequence where the first term is -5 and the common difference is 4.  The nth term is:

a = -5 + 4(n−1)

a = -5 + 4n − 4

a = 4n − 9

So the series is:

\sum_{j=1}^{5}(4j-9)

5 0
3 years ago
THERE WAS A HALF CLASS OF WATER IN A FRACTION HOW MUCH WATER WOULD 3 PEOPLE GET?
kkurt [141]

Answer:

0.16

Step-by-step explanation:

you divide 1/2 by 3 to 0.16666666 but it would recuce to 0.16

6 0
3 years ago
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