Question: 02.05-PR030 Develop a mathematical relationship for finding the accumulated amount F at the end of n years of a geometric series where the interest is
02.05-PR030 Develop a mathematical relationship for finding the accumulated amount F at the end of n years of a geometric series where the interest is i%. Put differently, you already have access to a (P|G i%,n) factor. Develop an (F|G
i%,n) factor.
a. Express the (F|G i%,n) factor in terms of the existing factors listed in the tables of Appendix A.
b. Express the (F|G i%,n) factor in terms of i and n.
c. Demonstrate that your answers to
(a) and
(b) are equivalent by calculating the value of F using a first payment of $0, increasing by $1,000 each year with n = 5 and i = 10% for each approach.
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