evaluate an ordinary annuity for
A=M [1 + r over n]^nt -1
____________
rn
For m,r,t $150;80%;40 year
Assume monthly payments round to the nearest cents.
Thank you for your help.
what, no calculator?
150((1+.8/1)^(40)-1)/(.80*1)
I'm assuming n=1, since you don't say...
you can figure the answer, but I seriously doubt there is an 80% annuity out there...
thank you for your help Steve sorry if I put you out of your way.
To evaluate an ordinary annuity using the formula A = M[(1 + r/n)^(nt) - 1]/(r/n), where A is the future value of the annuity, M is the monthly payment, r is the interest rate per period, n is the number of compounding periods per year, and t is the number of years, you need to plug in the given values.
In this case:
M = $150 (monthly payment)
r = 80% (interest rate per period)
t = 40 years (number of years)
n = 12 (compounding periods per year)
Let's substitute these values into the formula and calculate the future value of the annuity:
First, convert the interest rate to a decimal by dividing it by 100: r = 80%/100 = 0.8
Next, substitute the values into the formula:
A = $150[(1 + 0.8/12)^(12*40) - 1]/(0.8/12)
Now, simplify the expression:
A = $150[1.0067^(480) - 1]/(0.0667)
Calculate the exponent:
1.0067^(480) ≈ 202.010
A = $150[202.010 - 1]/(0.0667)
Subtract 1 from 202.010:
202.010 - 1 ≈ 201.010
A = $150[201.010]/(0.0667)
Finally, calculate the future value of the annuity:
A ≈ $452,128.03
Therefore, the future value of the ordinary annuity is approximately $452,128.03.