The Mathematics of Money

142 Chapter 4 Annuities Rent payments (until the rent changes) Pension or Social Security payments (as long as payments do not c ...

Copyright © 2008, The McGraw-Hill Companies, Inc. 4.1 What Is an Annuity? 143 payments are all equal, and are made at regular in ...

144 Chapter 4 Annuities EXERCISES 4.1 A. The Defi nition of an Annuity Determine whether or not each of the following situations ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Exercises 4.1 145 Wyatt just attended a sales presentation held by the invest ...

D. Grab Bag For each of the following scenarios, determine whether or not the payments describe an annuity. If they do, determin ...

Copyright © 2008, The McGraw-Hill Companies, Inc. 4.2 Future Values of Annuities 147 Approach 1: The Chronological Approach A na ...

148 Chapter 4 Annuities of a final way to handle these situations, though, as we will see before long, the bucket approach can b ...

Copyright © 2008, The McGraw-Hill Companies, Inc. It’s nice to have a formula, but at this point alarms should be going off in y ...

150 Chapter 4 Annuities The obvious shortcoming of this approach is that a reasonably sized table can list only a limited number ...

Copyright © 2008, The McGraw-Hill Companies, Inc. which leads to: (0.072)s n (^) |i
(1.072)^5  1 Finally, dividing both sides ...

152 Chapter 4 Annuities operations, or if you do not want to try to enter a formula this large all at once, the steps would be: ...

Copyright © 2008, The McGraw-Hill Companies, Inc. same as the one we made with compound interest when we moved from annual compo ...

154 Chapter 4 Annuities We can work this out exactly as before: Operation Result 1 .005916667
1.005916667 ^180
2.891749861  ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Finding the Total Interest Earned Our annuity formulas do not provide any easy ...

156 Chapter 4 Annuities Example 4.2.8 On New Year’s Day 2004, Mariano resolved to deposit $2,500 at the start of each year into ...

Example 4.2.10 Suppose $100 per month is deposited in an account for which the interest is 6% compounded quarterly. Find the fut ...

158 Chapter 4 Annuities b. Bucket Payment from Year Payment Amount Years of Interest Future Value 1 $1,359.55 2 $1,359.55 3 $1,3 ...

Copyright © 2008, The McGraw-Hill Companies, Inc. You deposit $3,000 each year into an investment account that earns 7.5% inter ...

160 Chapter 4 Annuities For each of Problems 14 to 17: a) Find n. b) Find i (expressed as either a fraction or a decimal). c) Fi ...

Copyright © 2008, The McGraw-Hill Companies, Inc. Find the future value of an annuity due of $502.37 per year for 18 years at 5 ...