What is the values of the following annuities if interest is compounded annually

Anonymous
timer Asked: Nov 20th, 2015
account_balance_wallet $5

Question Description

What is the value of the following annuities if the interest rate is compounded annually. what is the total amount of interest earned. R=$1000  i=0.08  n=25

Tutor Answer

DrMath
School: UCLA

Thank you for the opportunity to help you with your question!

Thank you for the opportunity to help you with your question!

In order to find the value of the annuities we just need to use the following expression and we enter R=$1000  i=0.08  n=25.

PV = R( 1 - (1+i)^-n )/i = (1000)(1 - (1+0.08)^-25 )/0.08 = (1000)(1 -1.08^-25)/0.08 = (1000)(1-0.146017905)/0.08

PV = (1000)(0.853982095)/0.08 = 853.982095/0.08 = 10674.7761875

PV = $10674.78


Please let me know if you need any clarification. I'm always happy to answer your questions.Please let me know if you need any clarification. I'm always happy to answer your questions.

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Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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