Question

find the value of the ordinary annuity at the end of the indicated time period. The payment R, frequency of deposits m, annual interest rate r, and the period t are given. Amount $600; compounded quarterly; 6.5% interest rate, 8 yearsthe value of the ordinary annuity is $______ (round to nearest cent)

Answer 1

Given the formula for the Amount as;

`\begin{gathered} A=R((1+(r)/(m))^n-1)/((r)/(m)) \\ \text{Where }n=mt \\ R=600 \\ r=6.5\text{ \%=0.065} \\ m=4 \\ t=8 \end{gathered}`
`\begin{gathered} A=600((1+(0.065)/(4))^(32)-1)/((0.065)/(4)) \\ A=600(0.6750)/(0.01625) \\ A=600(41.54) \\ A=24923.08 \end{gathered}`

The value of the ordinary annuity is $24923.08