Question

I really need help solving this...

Answer 1

annuity formula: A=R*( (1+i)^n - 1 ) / (i)

Answer 2

compound formula: A=P(1+ r/n)^nt

Answer 3

Sorry, it won't load for me, or else I really would help you.

Answer 4

A company contributes $150 per month into a retirement fund paying a nominal interest rate of 4.40% APR compounded monthly and employees are permitted to invest up to $ 2,900 per year into another retirement fund which pays a nominal interest rate of 4.40% APR compounded annually.
How large can the combined retirement fund be worth in 25 years?

Answer 5

we can do this if you have the formulas

Answer 6

i do but im not getting the results.

Answer 7

i guess this is the formula you wrote
A=R*( (1+i)^n - 1 ) / (i)

but i am not sure what all the variable represent

Answer 8

ok A stands for Annuity, R is the payment, i is the APR/frequency of pay, and n is the frequency of pay

Answer 9

so for example "i" would be .044/12

Answer 10

ok

Answer 11

then \[\frac{150(1+\frac{.044}{12})^{12-1}}{\frac{.044}{12}}\] but that can't be right, because there is no time mentioned in the formula
is perhaps \(n\) the number of payments?

Answer 12

that would make more sense
it can't really be the frequency of the payments minus one
there has to be something mentioning the number of payments made

Answer 13

n is 12 *25 i think

Answer 14

ooh ok it is the number of payments

Answer 15

\[\frac{150(1+\frac{.044}{12})^{12\times 25-1}}{\frac{.044}{12}}\]

Answer 16

why minus 1?

Answer 17

that is what you wrote

Answer 18

you wrote \(n-1\) i assumed that was in the exponent

Answer 19

makes sense if you are summing a geometric sequence i think

Answer 20

its not n-1. its raised to n and then you subtract everything in the parenthesis by 1.

Answer 21

oh damn ok

Answer 22

A = R ( ( 1+i)^(n) - 1 ) / (i)

Answer 23

\[\frac{150((1+\frac{.044}{12})^{300}-1)}{\frac{.044}{12}}\]

Answer 24

i get 81741.62 rounded
http://www.wolframalpha.com/input/?i= \frac{150%28%281%2B\frac{.044}{12}%29^{300}-1%29}{\frac{.044}{12}}

Answer 25

yeah thats what i got earlier too

Answer 26

what do we do with the 2900?

Answer 27

redo it

Answer 28

\[2900((1.044)^{25}-1)\]

Answer 29

since it is yearly, \(i=1\)

Answer 30

why dont we divide or multiply by 12 anywhere?

Answer 31

not if it is yearly, no
that is for monthly

Answer 32

o i think thats probably what ive been doing wrong

Answer 33

2900 per year compounded annually it says

Answer 34

THANKS! :)