Tom wants to put aside $120 at the end of each month into an account earning 6% compounded monthly, and have 30,000 at the end of ten years. How much would tom’s initial balance have to be? Savings lans are one of the common types of annuities. As stated earlier, an annuity is a series of equal payments amde at regular intervals. We will look at ordinary annuities in which payments are made at the end of each period. The futrue value of an ordianry annuity formula is A is the future value r is the annual interest rate n is the number of interest periods per year t is the number of years m is the regular payment
Tom wants to put aside $120 at the end of each month into an account earning 6% compounded monthly, and have 30,000 at the end of ten years. How much would tom’s initial balance have to be? Savings lans are one of the common types of annuities. As stated earlier, an annuity is a series of equal payments amde at regular intervals. We will look at ordinary annuities in which payments are made at the end of each period. The futrue value of an ordianry annuity formula is A is the future value r is the annual interest rate n is the number of interest periods per year t is the number of years m is the regular payment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Tom wants to put aside $120 at the end of each month into an account earning 6% compounded monthly, and have 30,000 at the end of ten years. How much would tom’s initial balance have to be?
Savings lans are one of the common types of annuities. As stated earlier, an annuity is a series of equal payments amde at regular intervals. We will look at ordinary annuities in which payments are made at the end of each period. The futrue value of an ordianry annuity formula is
A is the future value
r is the annual interest rate
n is the number of interest periods per year
t is the number of years
m is the regular payment
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