UESTION 4
2 answers:
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Recall that the future value (FV), of an annuity payment of $P, for, n years at, t times a year at, r% interest compounded, t times a year is given by
Given that <span>More Money 4U offered an annuity that pays r = 5.7% = 0.057 compounded monthly (12 times a year or t = 12). If P = $1,011 is deposited into this annuity every month (t = 12), then after n = 6 years the amount in the account is given by:
Therefore, </span>the amount in <span>the account after 6years rounded to the nearest dollar is $86,546.
PART 2:
Given that </span><span>$1,011 is deposited into this annuity every month for 6 years, the amount deposited into the account is given by
$1,011 x 12 x 6 = $72,792
Therefore, the amount of interest accrued is given by
$86,546 - $72,792 = $13,754
Therefore, the amount of interest received is $13,754
</span>
Given that <span>More Money 4U offered an annuity that pays r = 5.7% = 0.057 compounded monthly (12 times a year or t = 12). If P = $1,011 is deposited into this annuity every month (t = 12), then after n = 6 years the amount in the account is given by:
Therefore, </span>the amount in <span>the account after 6years rounded to the nearest dollar is $86,546.
PART 2:
Given that </span><span>$1,011 is deposited into this annuity every month for 6 years, the amount deposited into the account is given by
$1,011 x 12 x 6 = $72,792
Therefore, the amount of interest accrued is given by
$86,546 - $72,792 = $13,754
Therefore, the amount of interest received is $13,754
</span>