## anonymous 3 years ago I really need help solving this...

1. anonymous

2. anonymous

annuity formula: A=R*( (1+i)^n - 1 ) / (i)

3. anonymous

compound formula: A=P(1+ r/n)^nt

4. anonymous

Sorry, it won't load for me, or else I really would help you.

5. anonymous

A company contributes $150 per month into a retirement fund paying a nominal interest rate of 4.40% APR compounded monthly and employees are permitted to invest up to$ 2,900 per year into another retirement fund which pays a nominal interest rate of 4.40% APR compounded annually. How large can the combined retirement fund be worth in 25 years?

6. anonymous

we can do this if you have the formulas

7. anonymous

i do but im not getting the results.

8. anonymous

i guess this is the formula you wrote A=R*( (1+i)^n - 1 ) / (i) but i am not sure what all the variable represent

9. anonymous

ok A stands for Annuity, R is the payment, i is the APR/frequency of pay, and n is the frequency of pay

10. anonymous

so for example "i" would be .044/12

11. anonymous

ok

12. anonymous

then $\frac{150(1+\frac{.044}{12})^{12-1}}{\frac{.044}{12}}$ but that can't be right, because there is no time mentioned in the formula is perhaps $$n$$ the number of payments?

13. anonymous

that would make more sense it can't really be the frequency of the payments minus one there has to be something mentioning the number of payments made

14. anonymous

n is 12 *25 i think

15. anonymous

ooh ok it is the number of payments

16. anonymous

$\frac{150(1+\frac{.044}{12})^{12\times 25-1}}{\frac{.044}{12}}$

17. anonymous

why minus 1?

18. anonymous

that is what you wrote

19. anonymous

you wrote $$n-1$$ i assumed that was in the exponent

20. anonymous

makes sense if you are summing a geometric sequence i think

21. anonymous

its not n-1. its raised to n and then you subtract everything in the parenthesis by 1.

22. anonymous

oh damn ok

23. anonymous

A = R ( ( 1+i)^(n) - 1 ) / (i)

24. anonymous

$\frac{150((1+\frac{.044}{12})^{300}-1)}{\frac{.044}{12}}$

25. anonymous

i get 81741.62 rounded http://www.wolframalpha.com/input/?i= \frac{150%28%281%2B\frac{.044}{12}%29^{300}-1%29}{\frac{.044}{12}}

26. anonymous

yeah thats what i got earlier too

27. anonymous

what do we do with the 2900?

28. anonymous

redo it

29. anonymous

$2900((1.044)^{25}-1)$

30. anonymous

since it is yearly, $$i=1$$

31. anonymous

why dont we divide or multiply by 12 anywhere?

32. anonymous

not if it is yearly, no that is for monthly

33. anonymous

o i think thats probably what ive been doing wrong

34. anonymous

2900 per year compounded annually it says

35. anonymous

THANKS! :)