Explanation Given information: Don contributes $ 500 at the end of each quarter to a tax-sheltered annuity with the per annum rate of return assumed to be 8 % compounded quarterly. Formula used: Theorem of amount of an annuity: Suppose that P is the deposit in dollars made at the end of each payment period for an annuity paying i percent interest per payment period. The amount A of the annuity after n deposits is A = P ( 1 + i ) n − 1 i Calculation: Don contributes $ 500 at the end of each quarter to a tax-sheltered annuity so P = $ 500

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ISBN: 9780321979070

Author: Michael Sullivan

Publisher: PEARSON

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Chapter 12.3, Problem 91AYU

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To calculate: The value of TSA will be after the $80th$ deposit ( $20$ years) when Don contributes $$500$ at the end of each quarter to a tax-sheltered annuity with the per annum rate of return is assumed to be $8%$ compounded quarterly.

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Chapter 12.3, Problem 90AYU

Chapter 12.3, Problem 92AYU

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The value of TSA will be after the 80 t h deposit ( 20 years) when Don contributes $ 500 at the end of each quarter to a tax-sheltered annuity with the per annum rate of return is assumed to be 8 % compounded quarterly.

Solution Summary: The author calculates the value of TSA after Don contributes 500 at the end of each quarter to a tax-sheltered annuity with the per annum rate of return assumed to be 8%

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To calculate: The value of TSA will be after the $80th$ deposit ( $20$ years) when Don contributes $$500$ at the end of each quarter to a tax-sheltered annuity with the per annum rate of return is assumed to be $8%$ compounded quarterly.

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Chapter 12 Solutions