{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

SondraStark_Unit8Assignment_BU250-03

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

This preview shows pages 1–4. Sign up to view the full content.

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.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
2000 at 6% interest.

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.

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....
View Full Document

{[ snackBarMessage ]}