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Math Help - Annuity compound interest

  1. #1
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    Annuity compound interest

    Hi, I have been working on this problem for some time now and need a guidance.

    How much would u have after investing $150 every month for ten years in an account that pays 4.25% compounded monthly.

    So i know the following information

    0.0425/ 12 - 0.0035
    interest paid 120 times

    I am awaure of the formula, Sn = A (r^n-1) / 1-r but it my result does not seem to make sense.

    Thanks
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  2. #2
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    I usually use the finance feature of my calculator. I would input PMT = 150, n = 120, i = 4.25/12, and then click compute on FV option.
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  3. #3
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    ok thanks, I will try and find on online
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  4. #4
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    Do you have a Ti - 83, 84, or 89?
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  5. #5
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    no unfortunately not
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  6. #6
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    Ti -BA II Plus?
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  7. #7
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    lol nope no calculators
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  8. #8
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    \displaystyle \mbox{FV}_{\mbox{annuity}}=\frac{\left(1+\frac{i}{  n}\right)^{n*t}-1}{\frac{i}{n}}*\mbox{PMT}=\frac{\left(1+\frac{.04  25}{12}\right)^{120}-1}{\frac{.0425}{12}}*150
    Last edited by dwsmith; January 10th 2011 at 05:50 PM. Reason: Forgot PMT
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  9. #9
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    thanks!
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  10. #10
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    i got 148 ?!?!?
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  11. #11
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    Quote Originally Posted by Chr2010 View Post
    i got 148 ?!?!?
    Noooo. FV = $22,381.09
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  12. #12
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    lol forgot to multiply by 150!!! thanks so much for ur help!
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  13. #13
    DCU
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    Were you given the fact you'll need Sn in the question? If not, you'd need more info to find out if the annuity is being paid in arrears or in advance.
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