College Algebra (6th Edition)

Published by Pearson
ISBN 10: 0-32178-228-3
ISBN 13: 978-0-32178-228-1

Chapter 8 - Sequences, Induction, and Probability - Exercise Set 8.3: 80

Answer

a). Amount received at age 65 after 40 year A = 171,271.4 b). Interest = 135,271.4

Work Step by Step

a). Deposit at age 25 per month = 75 Compound interest rate is 6.5% = 0.065 Amount received after n year A = $\frac{P [(1 + \frac{r}{n})^{n\times t} - 1]}{\frac{r}{n}}$ Amount received at age 65 after 40 year A = $\frac{75 [(1 + \frac{0.065}{12})^{12\times 40} - 1]}{\frac{0.065}{12}}$ = $75\frac{ 12.369}{0.00458}$ = 75$\times$ 2283.62= 171271.4 b). Interest = 171271.4 - (75$\times$12$\times$40) = 171271.4 - 36000 = 135271.4
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