Results 1 to 8 of 8

Math Help - Calculating future value.

  1. #1
    Newbie
    Joined
    Jan 2011
    Posts
    5

    Calculating future value.

    Hello, i stumbled across these two problems and wasn't entirely sure on how to do it, help is appreciated.

    Find the future value FV accumulated in an annuity after investing periodic payments R for t years at an annual interest rate r, with payments made and interest credited k times per year.

    1. R=$300, r=6%, t=12, k=4

    2. R=$610, r=6.5%, t=25, k=12

    Any help is appreciated, thanks!
    Last edited by mr fantastic; January 3rd 2011 at 09:14 PM. Reason: Re-titled.
    Follow Math Help Forum on Facebook and Google+

  2. #2
    MHF Contributor
    Joined
    Mar 2010
    From
    Florida
    Posts
    3,093
    Thanks
    5
    \displaystyle\sum_{n=0}^{t}\frac{PMT}{(1+\frac{i}{  k})^n}=PMT\sum_{n=0}^{t}\left(\frac{1}{1+\frac{i}{  k}}\right)^n

    \displaystyle r=\frac{1}{1+\frac{i}{k}}<1 \ \mbox{and} \ a=PMT

    \displaystyle PMT\sum_{n=0}^{t}\left(\frac{1}{1+\frac{i}{k}}\rig  ht)^n=\frac{a}{1-r}
    Follow Math Help Forum on Facebook and Google+

  3. #3
    Newbie
    Joined
    Jan 2011
    Posts
    5
    Hey thank for the reply, but, can you explain this better in words? I'm only 16 and i'm having trouble in my pre-calculus class. Thanks
    Follow Math Help Forum on Facebook and Google+

  4. #4
    MHF Contributor
    Joined
    Mar 2010
    From
    Florida
    Posts
    3,093
    Thanks
    5
    Take a and divide it by 1-r since it is a geometric series.
    Follow Math Help Forum on Facebook and Google+

  5. #5
    Newbie
    Joined
    Jan 2011
    Posts
    5
    Ok thanks, appreciate the help
    Follow Math Help Forum on Facebook and Google+

  6. #6
    MHF Contributor
    skeeter's Avatar
    Joined
    Jun 2008
    From
    North Texas
    Posts
    11,882
    Thanks
    672
    you should have a formula to calculate future value in your text or notes ... correct?
    Follow Math Help Forum on Facebook and Google+

  7. #7
    Newbie
    Joined
    Jan 2011
    Posts
    5
    Thanks for the help guys, and skeeter we have no notes for these problems at all.
    Last edited by mr fantastic; January 3rd 2011 at 09:16 PM. Reason: New question moved to new thread.
    Follow Math Help Forum on Facebook and Google+

  8. #8
    MHF Contributor
    Joined
    Dec 2007
    From
    Ottawa, Canada
    Posts
    3,110
    Thanks
    68
    Quote Originally Posted by nighthawk View Post
    Find the future value FV accumulated in an annuity after investing periodic payments R for t years at an annual interest rate r, with payments made and interest credited k times per year.

    1. R=$300, r=6%, t=12, k=4
    There's various ways of "writing down" a financial formula for annuities; one is:

    i = r / (100k)
    n = t * k

    FV = R[(1 + i)^n - 1] / i ; for above: 300(1.015^48 - 1) / .015 = ~20,689.57
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Future Value
    Posted in the Algebra Forum
    Replies: 2
    Last Post: March 7th 2011, 10:14 PM
  2. future value
    Posted in the Business Math Forum
    Replies: 4
    Last Post: July 28th 2010, 12:34 AM
  3. Future Values :O
    Posted in the Business Math Forum
    Replies: 1
    Last Post: March 19th 2010, 05:23 PM
  4. calculating interest rates and future values
    Posted in the Business Math Forum
    Replies: 1
    Last Post: May 3rd 2009, 06:04 PM

Search Tags


/mathhelpforum @mathhelpforum