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: 9

Answer

$\$ 572.34$

Work Step by Step

We are given: $A_{f}=5000, i= \frac{0.10}{4}=0.025, n=2*4=8$ The amount of an annuity is given by: $A_{f}=R \frac{(1+i)^{n}-1}{i}$ We solve this for $R$: $R=\frac{iA_{f}}{(1+i)^{n}-1}$ $R=\frac{(0.025)(5000)}{(1+0.025)^{8}-1}=\$ 572.34$
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