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August 21, 2014

August 21, 2014

Posted by **ms guzman** on Wednesday, September 22, 2010 at 1:48pm.

a) What is the value of the fund at the end of 8 years? $

b) What is the value of the fund after an additional 4 years? $

- math -
**MathMate**, Wednesday, September 22, 2010 at 4:46pmFor an annual payment P for n years at interest rate r, the value of the investment is

A=Pr^n+Pr^(n-1)+....Pr

=Pr(1+r+r²+...+r^{n-1})

=Pr(r^{n}-1)/(r-1)

After 8 years

P=5000

r=1.0615

n=8

A=5000*1.0615*(1.0615^8-1)/(.0615)

=52814.48

For the next 4 years

A=52814.48*1.0615^4

=67055.28

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