Results 1 to 2 of 2

Thread: Ordinary Annuities: Future Value and Present Value

  1. #1
    Newbie
    Joined
    Oct 2017
    From
    Manitoba
    Posts
    3

    Ordinary Annuities: Future Value and Present Value

    Need help with 2 problems.


    1.)Charlene has made contributions of 3,400 dollars to her RRSP at the end of every half year for the past seven years. The plan has earned 9% compounded semiannually. She has just moved the funds to another plan earning 7.5% compounded quarterly, and will now contribute $2400 at the end of every three months.

    What total amount will she have in the plan five years from now? (Do not round intermediate calculations and round your final answer to 2 decimal places.)


    2.)What price will a finance company pay for a conditional sale contract requiring 12 monthly payments of $176.00, if the company requires a rate of return of 21% compounded semiannually? The first payment is due one month from now. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
    Last edited by topsquark; Nov 7th 2017 at 07:20 PM.
    Follow Math Help Forum on Facebook and Google+

  2. #2
    MHF Contributor
    Joined
    Feb 2015
    From
    Ottawa Ontario
    Posts
    1,695
    Thanks
    318

    Re: Ordinary Annuities: Future Value and Present Value

    Quote Originally Posted by TheKid1992 View Post

    1.)Charlene has made contributions of 3,400 dollars to her RRSP at the end of every half year for the past seven years. The plan has earned 9% compounded semiannually. She has just moved the funds to another plan earning 7.5% compounded quarterly, and will now contribute $2400 at the end of every three months.

    What total amount will she have in the plan five years from now? (Do not round intermediate calculations and round your final answer to 2 decimal places.)
    Step1: calculate value at end of 7 years
    c = 3400
    i = .09/2 = .045
    n = 7*2 = 14
    v = ?
    v = c*[(1 + i)^n - 1] / i

    Step 2: calculate value of v 5 years later
    i = .075/4 = .01875
    n = 5*4 = 20
    v = v(1 + i)^n

    Step3: calculate accumulation during last 5 years
    c = 2400
    i = as in step2
    n = as in step 2
    w = ?
    w = c*[(1 + i)^n - 1] / i

    Total amount = v + w

    We'll help you with part2 after you show your
    understanding of above; deal??!!
    Last edited by DenisB; Nov 8th 2017 at 09:53 AM.
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. [SOLVED] Ordinary Annuities and Annuities help
    Posted in the Business Math Forum
    Replies: 6
    Last Post: Dec 5th 2011, 02:04 PM
  2. Replies: 10
    Last Post: Oct 15th 2011, 06:26 PM
  3. Help with Present Value of annuities
    Posted in the Business Math Forum
    Replies: 1
    Last Post: Jun 6th 2010, 10:37 PM
  4. Future Values of Annuities
    Posted in the Pre-Calculus Forum
    Replies: 2
    Last Post: Mar 24th 2009, 07:10 PM
  5. Last One: Future Values of Annuities
    Posted in the Pre-Calculus Forum
    Replies: 0
    Last Post: Mar 24th 2009, 03:53 PM

/mathhelpforum @mathhelpforum