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If someone could explain step by step how to do matched problem #1 Ordinary annuity at 8.5% actually for 20 years. What is the value
If someone could explain step by step how to do "matched problem #1
Ordinary annuity at 8.5% actually for 20 years. What is the value of an annuity at the end of 10 years if $,000 is deposited every 6 months into an account earning 8% compounded semiannually? How much of this value is interest? The table in Figure 2 is called a balance sheet. Let's take a closer look at the construction of this table. The first line is a special case because the payment is made at the end of the period and no interested is earned. Each subsequent line of the table is computed as follows. payment + interest + old balance = new balance 2.000 + 0.085(2,000) + 2,000 = 4, 170 2,000 + 0.085(4, 170) + 4, 170 = 6, 524, 45 And so on. The amounts at the bottom of each column in the balance sheet agree with the results we obtained by using formula (6), as you would expect. Although balance sheets are appropriate for certain situation, we will concentrate on applications of formula(6). There are many important problems that can be solved only by using this formula. Discuss the similarities and difference in the graphs of future value FV as a function of time t for ordinary annuities in which $100 is deposited each month for 8 years and interest is compounded monthly at annual of 4%, 8% and 12%, respectively (Fig.3) Discuss the connection between the graph of the equation y = 100r, where t is time in months, and the graphs of part (A). Ordinary annuity at 8.5% actually for 20 years. What is the value of an annuity at the end of 10 years if $,000 is deposited every 6 months into an account earning 8% compounded semiannually? How much of this value is interest? The table in Figure 2 is called a balance sheet. Let's take a closer look at the construction of this table. The first line is a special case because the payment is made at the end of the period and no interested is earned. Each subsequent line of the table is computed as follows. payment + interest + old balance = new balance 2.000 + 0.085(2,000) + 2,000 = 4, 170 2,000 + 0.085(4, 170) + 4, 170 = 6, 524, 45 And so on. The amounts at the bottom of each column in the balance sheet agree with the results we obtained by using formula (6), as you would expect. Although balance sheets are appropriate for certain situation, we will concentrate on applications of formula(6). There are many important problems that can be solved only by using this formula. Discuss the similarities and difference in the graphs of future value FV as a function of time t for ordinary annuities in which $100 is deposited each month for 8 years and interest is compounded monthly at annual of 4%, 8% and 12%, respectively (Fig.3) Discuss the connection between the graph of the equation y = 100r, where t is time in months, and the graphs of part (A) Step by Step Solution
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