Question

Find the value of the annuity
\[a_1 = 9000, I=0.05, n= 10\]

Answer 1

This is what I have so far \[9000 (\frac{(1+0.05)^{10 }-1 }{ 0.05 })\] I think that this would be the right approach

Answer 2

future value? or present value?

Answer 3

future

Answer 4

looks fine to me

Answer 5

If i do math on the top I got 0.62889463 do I divide that with the bottom 0.05

Answer 6

yes

Answer 7

I got 12.5778926

Answer 8

that is what would be called a factor of 1 dollar.

Answer 9

do I then multiply this number to the 9000

Answer 10

yes, since there is 9000 dollars, and the factor of 1 dollar is 12.5779

multiply the 2 to get the value for 9000 dollars

Answer 11

I got 113201.1

Answer 12

so $113,201.10

Answer 13

seems reasonable to me

Answer 14

i got .03 or .04, but thats immaterial

Answer 15

It says in my homework that this isn't right

Answer 16

I work in mathlab so if the answer is wrong it tells me

Answer 17

it also has a "work similar problem" option. make sure your assumptions are correct, or if its wanting you to use a tabled value for the factor instead

Answer 18

it might even be saying to round to the nearest yadayada

Answer 19

it is

Answer 20

round to the nearest cent

Answer 21

does it ask for a tabled factor, or a formula factor? if no table is presented, then we can assume the formula method

Answer 22

there is no table

Answer 23

y1 = P(1+r)^0
y2 = P(1+r)^1 + P(1+r)^0
y3 = P(1+r)^2 + P(1+r)^1 + P(1+r)^0
....
yn = P(1+r)^(n-1))+ ... +P(1+r)^2 + P(1+r)^1 + P(1+r)^0

let 1+r = k for cleaning up

yn = P(k)^(n-1))+ ... + P(k)^2 + P(k)^1 + P(k)^0

yn = P(k^(n-1)+ ... +(k)^2 + (k)^1 + (k)^0)
\[y_n = P\frac{1-k^n}{1-k}\]
\[y_n = P\frac{1-(1+.05)^n}{1-(1+.05)}\]
\[y_n = P\frac{1-(1+.05)^n}{-.05}\]
\[y_n = P\frac{(1+.05)^n-1}{.05}\]

Answer 24

9000((1.05)^10-1)/.05 = 113 201 . 032 82

Answer 25

You have me lost sorry

Answer 26

i just went and worked out the formula .... then i inputed the specifics

Answer 27

oh ok