Ordinary Annuities and Annuities help

• Dec 4th 2011, 03:37 PM
Johnnytest20
Ordinary Annuities and Annuities help
Could you plz show me how the formula for these problems work

R=1400 10% per year compounded quarterly for 8 years
Answer in the back of the book: 1st part \$67,410.39 2nd part: \$22,610.39

R=\$800, 9% per year compounded monthly for 4 years
Answer in the back of the book: 1st part\$46,016.57 2nd part \$7616.57

The problems below are compounded annually
R=\$1200 i= 0.075 n=8
Answer in the back of the book: 1st part \$13475.82 2nd part \$3875.82

R=\$17,544 i=0.08 n=6
Answer in the back of the book: 1st part \$138,997.66 2nd part \$33,733.66
• Dec 4th 2011, 06:00 PM
Wilmer
Re: Ordinary Annuities and Annuities help
What formula are you using?
Plus your problems are unclear: are they annuity immediate? What's 1st part, 2nd part?
• Dec 4th 2011, 06:09 PM
Johnnytest20
Re: Ordinary Annuities and Annuities help
Quote:

Originally Posted by Wilmer
What formula are you using?
Plus your problems are unclear: are they annuity immediate? What's 1st part, 2nd part?

The top two are ordinary annuity problems you have to find the value of by second part answers you have to find the total amount of interest earned subtracting/dividing or etc (you can ignore if you want). The bottom two are annuity due problems. My bad about not being specific enough.
• Dec 5th 2011, 09:47 AM
Wilmer
Re: Ordinary Annuities and Annuities help
Asking AGAIN Johnny: what formula are you using?
• Dec 5th 2011, 11:51 AM
Johnnytest20
Re: Ordinary Annuities and Annuities help
Quote:

Originally Posted by Wilmer
Asking AGAIN Johnny: what formula are you using?

I'm not sure, probably the Future value.

This is what it shows in my book for the those problems in the Opening post:

Attachment 23012
http://www.credit-card-customer-care...alculator.html
• Dec 5th 2011, 12:22 PM
Wilmer
Re: Ordinary Annuities and Annuities help
That's correct. Let's apply it to your 1st question:
"R=1400, 10% per year compounded quarterly for 8 years;
Future Value: \$67,410.39 , total interest: \$22,610.39"

F = Future value (?)
R = quarterly deposit (1400)
N = Number of quarters (8*4 = 32)
I = Interest per quarter (.10 / 4 = .025)

F = R[(1 + I)^N - 1] / I

F = 1400(1.025^32 - 1) / .025 = 67410.3885...

Total interest = Future value - total deposits
= 67410.3885... - 32*1400 = 22610.3885...

Study and master that...then go apply for job as Financial Analyst (Itwasntme)
• Dec 5th 2011, 01:04 PM
Johnnytest20
Re: Ordinary Annuities and Annuities help
@wilmer

lol no chance in hell ^^

thx for the help