Saturday

October 25, 2014

October 25, 2014

Posted by **help plzzz** on Sunday, May 1, 2011 at 4:32pm.

(a) Decide whether the problem relates to an ordinary annuity or an annuity due.

1

annuity due

ordinary annuity

.

(b) Solve the problem.

- finite math -
**MathMate**, Sunday, May 1, 2011 at 5:30pm1.

Note: "...pays $5,000 at the**beginning**of each month..."

Should that ring a bell?

2.

To find the present value of the annuity due, we can consider it as the sum of the first payment (immediate) and an ordinary annuity with one payment less (the last one).

Thus:

n=20*12-1=239

R=5000

i=7.7%/12

P=R + R(1-(1+0.077/12)^(-239))/(0.077/12)

=5000+5000(1-0.21682)/0.006416667

=5000+5000*122.0539

=5000+610269.5

=$615,269.50

**Answer this Question**

**Related Questions**

Statisics - The state lottery claims that its grand prize is $1 million. The ...

Statisics - The state lottery claims that its grand prize is $1 million. The ...

Statistics - The state lottery claims that its grand prize is $1 million. The ...

Math - HELP A Certain state's lottery LOTTO, is set up so that each player pays...

math - Suppose a state lottery prize of $2 million is to be paid in 20 payments ...

Liberal arts math - 1) A lottery draws six numbers from 42 possibilities, ...

tax accounting - bruce wilson won 2 million in the state lottery. the lottery ...

math - Consider a state lottery that has a weekly television show. On this show...

Business - A. Joe won a lottery jackpot that will pay him $12,000 each year for ...

math! - Imagine that you are doing research for a term paper in your English ...