For each of the following increasing annuities, specify i, n, R, and F. (a) If a

Question

For each of the following increasing annuities, specify i, n, R, and F. (a) If at the end of each month, $50 is deposited into a savings account paying 6% interest compounded monthly, the balance after 10 years will be $8193.97. (b) Mr. Smith is saving to buy a $65,000 yacht in the year 2017. Since 2007, he has been depositing $2675.19 at the end of each half-year into a fund paying 4% interest compounded semiannually. (a) i= (Type an integer or a decimal.) n = (Simplify your answer.) R = $ F = $ (b) i = (Type an integer or a decimal.) n = (Simply your answer.) R = $ F = $

Explanation / Answer

1) 6% compounded monthly

i = .06/12 = 0.005

n = 12* 10 = 120

R = $ 50

F = $ 8193.97

b) i = 0.04/2 = 0.02

n = 10*2 = 20

R = $ 2675.19

F = $ 65000

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