Find the amount of the ordinary annuity based on the information given. R=$10,500, 8% interest compounded semiannually for 8 years The amount of the ordinary annuity is S (Round to the nearest dollar as needed.)
Find the amount of the ordinary annuity based on the information given. R=$10,500, 8% interest compounded semiannually for 8 years The amount of the ordinary annuity is S (Round to the nearest dollar as needed.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Find the amount of the ordinary annuity based on the information given.
R = $10,500, 8% interest compounded semiannually for 8 years
The amount of the ordinary annuity is
(Round to the nearest dollar as needed.)
Expert Solution
Step 1
Ordinary annuity: The Ordinary due refers to the annuity which is paid at the end of the each period. The example of the Ordinary annuity is home loan mortgage payment . The borrower pays the EMI at the end of every month
Given information As the per the question:
R= periodic payment=$10,500
r= periodic interest rate=8%
n= the number of periods=8 years
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