MA373 F15 Quiz 3 Solution

MA373 F15 Quiz 3 Solution - There are two versions of this...

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October 20, 2015 Copyright Jeffrey Beckley 2015 There are two versions of this quiz. Find your version.
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October 20, 2015 Copyright Jeffrey Beckley 2015 MATH 373 Quiz 3 Fall 2015 October 14, 2015 1. Nancy is receiving an increasing annuity for the next 35 years. The annuity makes quarterly payments at the end of each quarter. The quarterly payments during the first year are 100 each. The quarterly payments during the second year are 200 each. The payments continue to increase each year until payments of 3500 are made each quarter of the 35 th year. Calculate the present value of Nancy’s annuity using an annual effective interest rate of 8%. Solution: 4 (4) (4) (4) 1/4 35 (4) This is the formula that does not follow the rule. We are given that 0.08. We also need 1 1.08 (1.08) 1 0.019426547 4 4 4 1 (1.08) (1.08) 35( 0.08 (100) 4 n i ni i i i i a nv PV P i   35 1.08) 52,607.01 0.019426547
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October 20, 2015 Copyright Jeffrey Beckley 2015 2. A 20 year continuous annuity pays at a rate of 1500 t at time t . Calculate the present value of this annuity using a rate of 10% compounded continuously.
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