Determine the principal that must be deposited today to provide for each ordinary simple annuity using the formula: A=(R((1+i)^n-1))/i
a) Payments of $3500 for 7 years at 6.5% per year compounded annually.
My answer:
R=3500, i= 6.5%/100 = 0.065 / 12 months = 0.00541, N = 7*12=84

A = 370772.22

But the answer at the back of my textbook says $19195.82

  1. 👍 0
  2. 👎 0
  3. 👁 36

Respond to this Question

First Name

Your Response

Similar Questions


    Life for Kids Company, a small producer of plastic swimming toys, wants to determine the most it should pay to purchase a particular ordinary annuity. The annuity consists of cash flows of $700 at the end of each year for 5 years.

    asked by JUNE on March 23, 2010
  2. Math

    The formula is A = (R((1+ i)^n -1))/i R is the regular payments i is the interest n is the number of compounding periods Determine the amount of each ordinary simple annuity. A) $650 deposited every 6 months for 8 years at 9% per

    asked by anonymous on October 28, 2019
  3. finance

    Q.1.Differentiate future value from present value and explain how compound interest differs from simple interest. Q.2. John expects to need $50,000 as a down payment on a house in six years. How much does she need to invest today

    asked by Ali on March 24, 2016
  4. math

    can I any one help me to find a formula to calculate 401K plans for my project? Thanks Compound Interest With compound interest, the interest due and paid at the end of the interest compounding period is added to the initial

    asked by jenny on April 30, 2007
  5. math,help

    what formula do i use for the following problem: which of the following investments is larger after 19years? a) $7500 is deposited annually and earns 4.5% interest compounded annually. b)$600 is deposited monthly and earns 4.5%

    asked by student on June 30, 2007
  6. Annuities

    Can someone tell me if this is ordinary annuity of future or ordinary values sinking funds present value or what is it. The question is You are earning an average of 46500 and will retire in 10 years. If you put 20% of your gross

    asked by Scott Ingraham on April 12, 2008
  7. maths

    determine the amount of each ordinary simple annuity. deposits of $2550 for 7 years at 9.7% per year compounded annually Search instead for determine the amount of each ordinary simple annuity. deposits of $2550 for 7 years at

    asked by peace on May 22, 2017
  8. finite math

    A $1.2 million state lottery pays $5,000 at the beginning of each month for 20 years. How much money must the state actually have in hand to set up the payments for this prize if money is worth 7.7%, compounded monthly? (a) Decide

    asked by help plzzz on May 1, 2011
  9. Math

    Amy Powell invested $8500 twice a year in an ordinary annuity at New York Securities for a period of 5 years at an annual interest rate of 10% compounded semiannually. Using the ordinary annuity table , calculate the total value

    asked by Melissa on February 27, 2013
  10. Finite math

    Consider the following annuity scheme: regular payments of $200 are made every two months at the end of the month (in other words, there are six equally spaced payments over the year) into an account with a nominal rate of 6%

    asked by Johnny on November 10, 2016
  11. Math

    James has set up an ordinary annuity to save for his retirement in 19 years. If his monthly payments are $250 and the annuity has an annual interest rate of 7.5%, what will be the value of the annuity when he retires? I am

    asked by Kelly on April 18, 2017

More Similar Questions