wkstlesson39 - MA 15200 Supplemental Worksheet, Lesson 39...

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MA 15200 Supplemental Worksheet, Lesson 39 For the following formulas : S is future value, P is present value, r is the annual interest rate, k is the number of compounding periods in a year, t is time in years, A is the amount of money, and R is the amount of payment; with the formula for the periodic interest rate r i k = . It is possible a formula from the previous lesson may also be used for these problems. 9. Future Value of an Annuity: (1 ) 1 kt i S R i + - = (The amount at the end for an ordinary annuity with regular payments.) 10. Present Value of an Annuity: 1 (1 ) kt i P R i - - + = (The present value of an ordinary annuity with regular payments.) 11. ‘Sinking Fund’ Payment for an Annuity: (1 ) 1 kt Si R i = + - (The amount of a payment that will provide a future value of an ordinary annuity.) 1) What regular payment should be made quarterly to provide $20,000 in 10 years at an annual rate of 6% compounded quarterly? Round to the nearest cent. 2)
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This note was uploaded on 04/23/2011 for the course MA 152 taught by Professor Owendavis during the Spring '08 term at Purdue University-West Lafayette.

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wkstlesson39 - MA 15200 Supplemental Worksheet, Lesson 39...

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