Explanation Given information: 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 5 % 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 Per annum rate of return is 5 % Per quarter rate of return is 5 % 4 = 0

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ISBN: 9780136845881

Author: Sullivan

Publisher: VST

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Chapter 12.3, Problem 91AYU

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To calculate: The value of TSA be after the 80th deposits (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 5% compounded quarterly.

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Chapter 12.3, Problem 90AYU

Chapter 12.3, Problem 92AYU

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The value of TSA be after the 80 t h deposits ( 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 5 % 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 is assumed to be 5