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20 votes
A. Use the appropriate formula to find the value of the annuity.

b. Find the interest.
Periodic Deposit
$3000 at the end of each year
Time
Rate
6% compounded annually
30 years
(round to the nearest dollar if needed)

User Macy Abbey
by
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2 Answers

17 votes
17 votes

Final answer:

To find the value of the annuity, use the formula Future Value = P((1 + r)^n - 1)/r, where P is the periodic deposit, r is the interest rate per period, and n is the number of periods. Plugging in the given values, the annuity is approximately $134,708. To find the interest, subtract the sum of all the periodic deposits from the future value of the annuity. The interest is approximately $35,708.

Step-by-step explanation:

To find the value of the annuity, we can use the formula:



Future Value = P((1 + r)^n - 1)/r



Where:


  • P is the periodic deposit, which is $3000 in this case

  • r is the interest rate per period, which is 6% compounded annually

  • n is the number of periods, which is 30 years



Plugging in these values into the formula, we can calculate the value of the annuity:



Future Value = $3000((1 + 0.06)^30 - 1)/0.06



Rounding to the nearest dollar, the value of the annuity is approximately $134,708.



To find the interest, we can subtract the sum of all the periodic deposits from the future value of the annuity:



Interest = Future Value - (P * n)



Plugging in the values:



Interest = $134,708 - ($3000 * 30)



Rounding to the nearest dollar, the interest is approximately $35,708.

User Stephan Leclercq
by
3.2k points
20 votes
20 votes

Answer:

i think The final answer would be $3512.58

Step-by-step explanation:

User ActiveX
by
3.2k points