anonymous
  • anonymous
I really need help solving this...
Mathematics
katieb
  • katieb
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anonymous
  • anonymous
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anonymous
  • anonymous
annuity formula: A=R*( (1+i)^n - 1 ) / (i)
anonymous
  • anonymous
compound formula: A=P(1+ r/n)^nt

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anonymous
  • anonymous
Sorry, it won't load for me, or else I really would help you.
anonymous
  • 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?
anonymous
  • anonymous
we can do this if you have the formulas
anonymous
  • anonymous
i do but im not getting the results.
anonymous
  • 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
anonymous
  • anonymous
ok A stands for Annuity, R is the payment, i is the APR/frequency of pay, and n is the frequency of pay
anonymous
  • anonymous
so for example "i" would be .044/12
anonymous
  • anonymous
ok
anonymous
  • 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?
anonymous
  • 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
anonymous
  • anonymous
n is 12 *25 i think
anonymous
  • anonymous
ooh ok it is the number of payments
anonymous
  • anonymous
\[\frac{150(1+\frac{.044}{12})^{12\times 25-1}}{\frac{.044}{12}}\]
anonymous
  • anonymous
why minus 1?
anonymous
  • anonymous
that is what you wrote
anonymous
  • anonymous
you wrote \(n-1\) i assumed that was in the exponent
anonymous
  • anonymous
makes sense if you are summing a geometric sequence i think
anonymous
  • anonymous
its not n-1. its raised to n and then you subtract everything in the parenthesis by 1.
anonymous
  • anonymous
oh damn ok
anonymous
  • anonymous
A = R ( ( 1+i)^(n) - 1 ) / (i)
anonymous
  • anonymous
\[\frac{150((1+\frac{.044}{12})^{300}-1)}{\frac{.044}{12}}\]
anonymous
  • 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}}
anonymous
  • anonymous
yeah thats what i got earlier too
anonymous
  • anonymous
what do we do with the 2900?
anonymous
  • anonymous
redo it
anonymous
  • anonymous
\[2900((1.044)^{25}-1)\]
anonymous
  • anonymous
since it is yearly, \(i=1\)
anonymous
  • anonymous
why dont we divide or multiply by 12 anywhere?
anonymous
  • anonymous
not if it is yearly, no that is for monthly
anonymous
  • anonymous
o i think thats probably what ive been doing wrong
anonymous
  • anonymous
2900 per year compounded annually it says
anonymous
  • anonymous
THANKS! :)

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