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mariomintchev

  • 2 years ago

I really need help solving this...

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  1. mariomintchev
    • 2 years ago
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  2. mariomintchev
    • 2 years ago
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    annuity formula: A=R*( (1+i)^n - 1 ) / (i)

  3. mariomintchev
    • 2 years ago
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    compound formula: A=P(1+ r/n)^nt

  4. glamsunnyskylar
    • 2 years ago
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    Sorry, it won't load for me, or else I really would help you.

  5. mariomintchev
    • 2 years ago
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    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. satellite73
    • 2 years ago
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    we can do this if you have the formulas

  7. mariomintchev
    • 2 years ago
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    i do but im not getting the results.

  8. satellite73
    • 2 years ago
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    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. mariomintchev
    • 2 years ago
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    ok A stands for Annuity, R is the payment, i is the APR/frequency of pay, and n is the frequency of pay

  10. mariomintchev
    • 2 years ago
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    so for example "i" would be .044/12

  11. satellite73
    • 2 years ago
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    ok

  12. satellite73
    • 2 years ago
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    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. satellite73
    • 2 years ago
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    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. mariomintchev
    • 2 years ago
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    n is 12 *25 i think

  15. satellite73
    • 2 years ago
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    ooh ok it is the number of payments

  16. satellite73
    • 2 years ago
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    \[\frac{150(1+\frac{.044}{12})^{12\times 25-1}}{\frac{.044}{12}}\]

  17. mariomintchev
    • 2 years ago
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    why minus 1?

  18. satellite73
    • 2 years ago
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    that is what you wrote

  19. satellite73
    • 2 years ago
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    you wrote \(n-1\) i assumed that was in the exponent

  20. satellite73
    • 2 years ago
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    makes sense if you are summing a geometric sequence i think

  21. mariomintchev
    • 2 years ago
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    its not n-1. its raised to n and then you subtract everything in the parenthesis by 1.

  22. satellite73
    • 2 years ago
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    oh damn ok

  23. mariomintchev
    • 2 years ago
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    A = R ( ( 1+i)^(n) - 1 ) / (i)

  24. satellite73
    • 2 years ago
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    \[\frac{150((1+\frac{.044}{12})^{300}-1)}{\frac{.044}{12}}\]

  25. satellite73
    • 2 years ago
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    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. mariomintchev
    • 2 years ago
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    yeah thats what i got earlier too

  27. mariomintchev
    • 2 years ago
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    what do we do with the 2900?

  28. satellite73
    • 2 years ago
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    redo it

  29. satellite73
    • 2 years ago
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    \[2900((1.044)^{25}-1)\]

  30. satellite73
    • 2 years ago
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    since it is yearly, \(i=1\)

  31. mariomintchev
    • 2 years ago
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    why dont we divide or multiply by 12 anywhere?

  32. satellite73
    • 2 years ago
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    not if it is yearly, no that is for monthly

  33. mariomintchev
    • 2 years ago
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    o i think thats probably what ive been doing wrong

  34. satellite73
    • 2 years ago
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    2900 per year compounded annually it says

  35. mariomintchev
    • 2 years ago
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    THANKS! :)

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