Homework Help: Annuity!

Posted by Thara! on Saturday, April 10, 2010 at 8:13pm.

When Raisel's son was born, she put $7,500 in an investment that earns 5.25% compounded quarterly. This investment will mature when her son turns 18 and will go straight into an annuity at 7.25% compounded and paying out monthly at the end of the period. The investment was to help pay for his 4-years of college. Find the size of these monthly payments received by Raisel's son during his college stay.

Annuity! - Reiny, Saturday, April 10, 2010 at 10:43pm
just change the appropriate numbers in the posting

http://www.jiskha.com/display.cgi?id=1270952022

They are the same question.
Annuity! - Thara!, Saturday, April 10, 2010 at 11:00pm
at age 18:
the amount of the investment = the present value of the annuity

6500(1.019375)^72 = x(1-0.0725/12^-48)/(0.0450/4)
19,177.84 = x(41.55860953)
x=461.46

is dis correct!!!
Annuity! - Thara!, Saturday, April 10, 2010 at 11:00pm
at age 18:
the amount of the investment = the present value of the annuity

6500(1.019375)^72 = x(1-0.0725/12^-48)/(0.0450/4)
19,177.84 = x(41.55860953)
x=461.46

is dis correct!!!
Annuity! - Thara!, Saturday, April 10, 2010 at 11:01pm
oh no...i mixed the queston
sry...ill try again!! oops
Annuity! - Thara!, Saturday, April 10, 2010 at 11:03pm
7500(1.013125)^72 = x(1-.0725/12^-48)/(.0725/12
19177.84 = x(41.55860953)
461.46 = x

is dis correct??
Annuity! - Reiny, Saturday, April 10, 2010 at 11:19pm
I got the same result to the penny!

good job!

Answer this Question

Related Questions

math! - When Raisel's son was born, she put $7,500 in an investment that ...
math help plz! - When Cody's son was born, he put $4,500 in an investment ...
Math! plz help! - When Cody's son was born, he put $4,500 in an investment ...
Business Algebra - Part I: As a financial planner a client comes to you for ...
Business Algebra - I need to know the formula for these questions and just how ...
College Algebra - Investment A: $5,000 invested for 7 years compounded ...
math 20 please check - Jacob is 25 yrs old and hopes to retire by 55. He invests...
algebra - determine the amount of an investment if $500 is invested at an ...
Algebra - Determine the amount of an investment if $500 is invested at an ...
math/ compounded - Scenario: A client comes to you for investment advice on his...

For Further Reading

First Name:
School Subject:
Answer: