Jim and Dianna want to save for their child’s college expenses. They find an annuity that pays 6% annual interest, compounded mo
1 answer:
Answer:
future value = $49163.8
so required amount will be $491200 nearest $100
Step-by-step explanation:
given data
annual interest rate = 6 %
annuity = $300 per month
time period = 10 years
to find out
how much money will they have for the college expenses
solution
we know that effective rate will be
effective rate =
effective rate = 5 ×
number of payment = 12 × 10 = 120
so future value will be express as
future value = annuity × .........1
future value = 300 ×
future value = 300 × 163.8793
future value = $49163.8
so required amount will be $491200 nearest $100
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Note that 6% converted to a decimal number is 6/100=0.06. Also note that 6% of a certain quantity x is 0.06x.
Here is how much the worker earned each year:
In the year 1985 the worker earned <span>$10,500.
</span>In the year 1986 the worker earned $10,500 + 0.06($10,500). Factorizing $10,500, we can write this sum as:
$10,500(1+0.06).
In the year 1987 the worker earned
$10,500(1+0.06) + 0.06[$10,500(1+0.06)].
Now we can factorize $10,500(1+0.06) and write the earnings as:
$10,500(1+0.06) [1+0.06]=
.
Similarly we can check that in the year 1987 the worker earned
, which makes the pattern clear.
We can count that from the year 1985 to 1987 we had 2+1 salaries, so from 1985 to 2010 there are 2010-1985+1=26 salaries. This means that the total paid salaries are:
.
Factorizing, we have
![=10,500[1+1.06+(1.06)^2+(1.06)^3+...+(1.06)^{26}]=10,500\cdot[1+1.06+(1.06)^2+(1.06)^3+...+(1.06)^{26}]](https://tex.z-dn.net/?f=%3D10%2C500%5B1%2B1.06%2B%281.06%29%5E2%2B%281.06%29%5E3%2B...%2B%281.06%29%5E%7B26%7D%5D%3D10%2C500%5Ccdot%5B1%2B1.06%2B%281.06%29%5E2%2B%281.06%29%5E3%2B...%2B%281.06%29%5E%7B26%7D%5D)
We recognize the sum as the geometric sum with first term 1 and common ratio 1.06, applying the formula
(where a is the first term and r is the common ratio) we have:
.
Finally, multiplying 10,500 by 59.17 we have 621.285 ($).
The answer we found is very close to D. The difference can be explained by the accuracy of the values used in calculation, most important, in calculating
.
Answer: D
Here is how much the worker earned each year:
In the year 1985 the worker earned <span>$10,500.
</span>In the year 1986 the worker earned $10,500 + 0.06($10,500). Factorizing $10,500, we can write this sum as:
$10,500(1+0.06).
In the year 1987 the worker earned
$10,500(1+0.06) + 0.06[$10,500(1+0.06)].
Now we can factorize $10,500(1+0.06) and write the earnings as:
$10,500(1+0.06) [1+0.06]=
Similarly we can check that in the year 1987 the worker earned
We can count that from the year 1985 to 1987 we had 2+1 salaries, so from 1985 to 2010 there are 2010-1985+1=26 salaries. This means that the total paid salaries are:
Factorizing, we have
We recognize the sum as the geometric sum with first term 1 and common ratio 1.06, applying the formula
Finally, multiplying 10,500 by 59.17 we have 621.285 ($).
The answer we found is very close to D. The difference can be explained by the accuracy of the values used in calculation, most important, in calculating
Answer: D
Answer:
As shown in the attachment,
Step-by-step explanation:
