MAT143-1004B-44 Phase 4IP2 12-20-10

MAT143-1004B-44 - n.d"Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement

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Running head: PHASE 4 INDIVIDUAL PROJECT 2 1 Phase 4 Individual Project 2 Nikki Brackin Colorado Technical University Online MAT143-1004B-44 12/20/2010 Memo
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PHASE 4 INDIVIDUAL PROJECT 2 2 Per Ivestopedia (n.d.), compound interest is, "interest that accrues on the initial principal and the accumulated interest of a principal deposit, loan or debt. Compounding of interest allows a principal amount to grow at a faster rate than simple interest, which is calculated as a percentage of only the principal amount." Loans, for example, may have the interest compounded every month. In this case, a loan with $500 initial principal and 1% interest per month would have a balance of $505 at the end of the first month, $510.05 at the end of the second month, and so on. An annuity is, "a contract or agreement by which one receives fixed payments on an investment for a lifetime or for a specified number of years." (American Heritage Dictionary,
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Unformatted text preview: n.d.) "Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years." (Ivestopedia, n.d.) Option number one is a better choice for the client as it leads to a higher sum of money after the end of the five years. However, if the client is unable to put down a high dollar investment up front, option number two would then be the only other option advisable. References PHASE 4 INDIVIDUAL PROJECT 2 3 Compound interest. (n.d.). Investopedia . Retrieved December 19, 2010, from Answers.com Web site: http://www.answers.com/topic/compound-interest-2 Annuity. (n.d.). The American HeritageĀ® Dictionary of the English Language, Fourth Edition . Retrieved December 19, 2010, from Answers.com Web site: http://www.answers.com/topic/annuity Annuity. (n.d.). Investopedia . Retrieved December 19, 2010, from Answers.com Web site: http://www.answers.com/topic/annuity...
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This note was uploaded on 04/28/2011 for the course MAT 143 taught by Professor Boodoosingh during the Fall '10 term at Colorado Technical University.

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MAT143-1004B-44 - n.d"Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement

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