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Finite Mathematics 1. Name Mathematics Date Section 3-3 FV of an Annuity; Sinking Funds Goal: To calculate future values of anities and solve problems involving sinking funds FV-PMT- Any sequence of payments at equal time intervals is called an annuity. To calculate the future value of an annuity r 11 where FV-future value (5) r=annual interest rate (as a decimal) and number of payments per year (periods) If the payments into an account are in accumdating funds to meet a future obligation Class form of an ordinary auty and the account is established for e account in called a sinking and (Unless otherwise noted, round monary onwers to the rest dollar, percenis so decimal places when written as a percentage, and time to the nearest year) Chapter 3 a) Suppose you deposit $1200 each year for 10 years in a savings account paying 5% compounded annually. How much would the account contain after 10 years? How much of the FV did you actually contribute? 1200( 05 --) PMT-periodic payment (5) t-time in years 1200 (1024) 1,721,600 3-13 Finite Mathematics If you could double only one of these which would benefit you more? b) The amount invested. How much of the FV did you actually contribute? c) The interest rate. How much of the FV did you actually contribute? Chapter 2 3-14 8. Mr. Johnson decides when is 40 Finite Mathematics d) The time. How much of the FV did you actually contribute? e) Write a short paragraph describing the results of parts a)-d). Chapli 2. Suppose you are only able to contribute $600 a year to the account described in #1a). Answer parts a)-d) of #1 based on the $600 per year contribution. 3-15