College Algebra 7th Edition

Published by Brooks Cole
ISBN 10: 1305115546
ISBN 13: 978-1-30511-554-5

Chapter 8, Sequences and Series - Section 8.4 - Mathematics of Finance - 8.4 Exercises: 10

Answer

$\$ 245.66$

Work Step by Step

We are given: $A_{f}=\$ 2000, i= \frac{0.06}{12}=0.005, n=8$ The amount of an annuity is given by: $A_{f}=R \frac{(1+i)^{n}-1}{i}$ We solve this for $R$: $R=\frac{iA_{f}}{(1+i)^{n}-1}$ $R=\frac{(0.005)(2000)}{(1+0.005)^{8}-1}=\$ 245.66$
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