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.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview.
Sign up
to
access the rest of the document.
 Spring '08
 OwenDavis
 Finance, Formulas, Time Value Of Money, Laura

Click to edit the document details