1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
professor190 [17]
3 years ago
9

$1000 is invested at the beginning of each year for 10 years. The rate of interest is fixed at 7.5% per annum. Interest is compo

unded annually. Calculate the total value of the investments at the end of the ten years.
Mathematics
1 answer:
Lemur [1.5K]3 years ago
5 0
 <span>Presumably you are saying that the 7.5% is the actual real effective per annum rate since you did not include a compounding interval. Therefore if you let R = 1.075 which is 7.5%, X = $1,000 and F(n) be the balance after n years then you can figure it out by thinking about what happens. After one year, your balance is: 

F(1) = X * R 

After two years, your balance is: 

F(2) = ( F(1) +X ) * R 
.: 
F(2) = X * R^2 + X * R 

After three years, your balance is: 

F(3) = ( F(2) + X ) * R 
F(3) = X * R^3 + X * R^2 + X * R 

You can see that the general form is: 

F(n) = X * summation of R^k for k = 1 to n 

Applying the summation of a geometric sequence equation and you get: 

F(n) = X * ( ( 1 - R^(n+1) ) / ( 1 - R ) - 1 ) 

Therefore the total value of the investments after 10 years is: 

F(10) = $1,000 * ( ( 1 - 1.075^11 ) / ( 1 - 1.075 ) - 1 ) 
F(10) = $15,208.12 

If you blindly use the programs in the business calculators, you'll get the wrong answer of $14,147.09 because those calculators assume that the deposit is made at the end of the year not at the beginning. The equation is slightly easier to work out that way as the summation of the geometric sequence would be for k from 0 to n-1. That's one of the downfalls of relying on those calculators, you don't actually understand what's happening. 

Now the portion of that which is from the first $1,000 payment is $1,000 * 1.075^10 which is $2,061.03</span><span>
</span>
You might be interested in
Marco needs to buy some dog food. At the nearest​ store, 3 bags of dog food cost ​$6.75. how much would he spend spend on six ba
ipn [44]
Your answer would be $13.50 because is 3 bags cost 6.75 and you need 6 bags then just multiply the 6.75 by 2 and you get your answer :)
7 0
3 years ago
Shane set his watch 18 seconds behind, and it falls behind another 2 seconds every day. How many days has it been since Shane la
suter [353]

Answer:

14 days

Step-by-step explanation:

18 seconds on day 1

44-18=26

26/2=13 days

Day 1 +13 Additional days=14 days

7 0
3 years ago
In this problem, we're going to explain why any trapezoid that can be inscribed in a circle must be an isosceles trapezoid. In t
Triss [41]

Since the trapezoid can be inscribed in a circle, that means angle B + angle D = 180 degree. Since AB is parallel to CD, then angle B + angle C = 180 degree. Therefore, angle D = angle C.

4 0
3 years ago
Read 2 more answers
Help me with 18 19 and 20 plz
Rzqust [24]
19: He multiplied instead of dividing which will make a totally incorrect answer
6 0
3 years ago
⚠️⚠️PLEASE HURRY DO QUESTIONS 1,2and 3⚠️⚠️<br> ILL GIVE 10 BRAINLY
gayaneshka [121]

Answer:

1. B>-7 2. M is > or = to 8.8 3. Y < 1/2

Step-by-step explanation:

6 1
3 years ago
Other questions:
  • The probability that all four test subjects had a true negative test result when they are randomly selected without replacement
    13·1 answer
  • Wendy is logging the number of video game levels she wins per hour. She has determined the function to be f(x) = 6x + 9, where x
    12·2 answers
  • Solve Gx) for the given domain.
    8·1 answer
  • Whats the difference between coplanar and collinear
    7·2 answers
  • How do you decompose 7
    10·2 answers
  • Factor the quadratic expression completely.
    11·1 answer
  • PEMDAS means and what is for
    5·1 answer
  • The hour hand of a clock moves −30° every hour. How many degrees does it move in 2&amp;1/5 hours?
    10·1 answer
  • Simplify the equation.
    13·2 answers
  • Which equation matches the graph of the greatest integer function given
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!