SondraStark_Unit8Assignment_BU250-03

SondraStark_Unit8Assignment_BU250-03 - $2,000 for 20 years...

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Carolyn Ellis will accumulate $73,570.95 over the next twenty years by making one payment of $2 This is calculated by determining the future value of an ordinary annuity with annual payments of $ Example on how I started… Year 1 2000 Year 2 2000(1.06)+2000=4120 Year 3 4120(1.06)+2000=6367.2 EtC. Carolyn would also need a lump sum of $2,000 at the same interest rate for the same term, in orde This can be verified by: 2000(36.768)=73572 which is the closest I could get.
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000 at 6% interest.
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Unformatted text preview: $2,000 for 20 years at 6% interest. er to gain that same amount. 1 1000(90.320)=90.320 2 1500(172.317)=258475.5 3 1000(5.867)=5867 1500(5.867)=8800.50 2000(47.727)=95454 Total = 110121.50 4 The result differs by over 147,000. I think these results are typical as in problem 2, Joseph was consta 5 Sinking payment value=FV x table value SP=300,000 X .0041437 SP=1243.11 tanly maintaining a higher payment and a higher interest rate....
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This document was uploaded on 05/06/2011.

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SondraStark_Unit8Assignment_BU250-03 - $2,000 for 20 years...

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