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

Business & Finance
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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

Nov 20th, 2015

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.
Nov 20th, 2015

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