Explanation Ordinary annuity is a series of equivalent payments made at the completion of successive periods over a fixed amount of time. Compounding periods are the intervals during which payments are made. The formula to compute the future value of ordinary annuity is, F V = P m t × ( 1 + i ) n − 1 i Where, FV is the future value, Pmt is the Annuity payment, i is the interest rate per period, n is the number of periods. For example: Consider that monthly deposit at the end of each month is $ 150 , frequency of payment is 1 month, time duration is 4 years, nominal rate of return is 3 % and interest is compounded monthly. The rate period is 0.25 % ( 3 % ÷ 12 period per year ) . The number of periods is 48 ( 4 years × 12 period per year ) . Substitute 48 for number of periods, 0.0025 for interest rate per period, $ 150 for Pmt in the formula F V = P m t × ( 1 + i ) n − 1 i

Contemporary Mathematics for Business & Consumers

8th Edition

ISBN: 9781305585447

Author: Robert Brechner, Geroge Bergeman

Publisher: Cengage Learning

See similar textbooks

Concept explainers

Unitary Method

The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.

Speed, Time, and Distance

Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 …

Profit and Loss

The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.

Units and Measurements

Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experime…

Videos

Question

Chapter 12, Problem 3CR

To determine

To fill: The blank provided in the statement “An ordinary annuity is paid or received at the ___________ of each period.”

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 12, Problem 2CR

Chapter 12, Problem 4CR

Students have asked these similar questions

For the position function s(t) = - 16t² + 105t, complete the following table with the appropriate average velocities. Then make a conjecture about the value of the instantaneous velocity at t = 1. Time Interval Average Velocity [1,2] Complete the following table. Time Interval Average Velocity [1, 1.5] [1, 1.1] [1, 1.01] [1, 1.001] [1,2] [1, 1.5] [1, 1.1] [1, 1.01] [1, 1.001] ப (Type exact answers. Type integers or decimals.) The value of the instantaneous velocity at t = 1 is (Round to the nearest integer as needed.)

Find the following limit or state that it does not exist. Assume b is a fixed real number. (x-b) 40 - 3x + 3b lim x-b x-b ... Select the correct choice below and, if necessary, fill in the answer box to complete your choice. (x-b) 40 -3x+3b A. lim x-b x-b B. The limit does not exist. (Type an exact answer.)

x4 -289 Consider the function f(x) = 2 X-17 Complete parts a and b below. a. Analyze lim f(x) and lim f(x), and then identify the horizontal asymptotes. x+x X--∞ lim 4 X-289 2 X∞ X-17 X - 289 lim = 2 ... X∞ X - 17 Identify the horizontal asymptotes. Select the correct choice and, if necessary, fill in the answer box(es) to complete your choice. A. The function has a horizontal asymptote at y = B. The function has two horizontal asymptotes. The top asymptote is y = and the bottom asymptote is y = ☐ . C. The function has no horizontal asymptotes. b. Find the vertical asymptotes. For each vertical asymptote x = a, evaluate lim f(x) and lim f(x). Select the correct choice and, if necessary, fill in the answer boxes to complete your choice. e

Chapter 12 Solutions

Contemporary Mathematics for Business & Consumers

Ch. 12.I - Freeport Bank is paying 8% interest compounded...Ch. 12.I - Vista Savings Loan is paying 6% interest...Ch. 12.I - Katrina Byrd invested $250 at the end of every...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, subject and related others by exploring similar questions and additional content below.

The blank provided in the statement “An ordinary annuity is paid or received at the ___________ of each period.”

Solution Summary: The author explains that an ordinary annuity is paid or received at the end of each period. Compounding periods are the intervals during which payments are made.

Concept explainers

Videos

To fill: The blank provided in the statement “An ordinary annuity is paid or received at the ___________ of each period.”

Want to see the full answer?

Chapter 12 Solutions