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: 15

Answer

$\$ 307.24$

Work Step by Step

We are given: $A_{p}=12000, i=\frac{0.105}{12}=0.00875, n=4*12=48$ The present value of an annuity is given by: $A_{p}=R \frac{1-(1+i)^{-n}}{i}$ We solve for $R$: $R=\frac{iA_{p}}{1-(1+i)^{-n}}:$ $R=\frac{(0.00875)(12000)}{1-(1+0.00875)^{-48}}=\$ 307.24$
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