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MM255 PROJECT 7
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1. Mike’s Sport Shop deposits $4,600 at the end of each year for 9 years at 6% annual interest.
a. How much will this ordinary annuity be worth at the end of the 9 years? (5 points)
Answer: $52,858.60
FV = 4,600 (11.491) = 52,858.60
b. How much more will this annuity be worth (annuity due) if Mike deposits the money at the beginning of each year instead of at the end of each year? (5 points)
Answer: $3,171.52
FV = 4,600 (11.491)(1.06) = 56,030.12
56,030.12 - 52,858.60 = 3,171.52
- Barb and John Reed want to know how much they must deposit in a retirement savings account today to have payments of $2,750 every six months for 20 years. The retirement account is paying 6% annual interest, compounded semiannually. (5 points)
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[Solved] MM255 PROJECT 7
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- Submitted On 10 May, 2017 01:10:17
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- Homeworkmerit
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1. Mike’s Sport Shop deposits $4,600 at the end of each year for 9 years at 6% annual interest.
a. How much will this ordinary annuity be worth at the end of the 9 years? (5 points)...
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