document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=32737>Question 32737</A>This question is from textbook <A HREF=http://www.amazon.com/exec/obidos/ASIN/0131139487/algebrahomeworkh>introductory mathematical analysis</A><BR>\n" );
document.write( ": <I><SPAN STYLE=\"word-break: break-all;\"> A person has the option of satisfying a debt by either paying $5000 now and $5000 in 2 years, or by paying $3000 now, $3000 a year from now, and a final payment of x dollars in 2 years from now. Determine the amount of final payment if the interest rate is 8% compounded quarterly?\r<BR>\n" );
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document.write( "Thank you! </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #20141 by </B><A HREF=/tutors/aboutme.mpl?userid=Nate><B>Nate(3500)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Nate><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=20141\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> the equation for compounded is:<BR>\n" );
document.write( "y=a(1 + r/n)^(tn)<BR>\n" );
document.write( "y is final amount<BR>\n" );
document.write( "a is initial amount<BR>\n" );
document.write( "r is rate<BR>\n" );
document.write( "n is compounded per times per year<BR>\n" );
document.write( "t is time in years<BR>\n" );
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document.write( "A person has the option of satisfying a debt by either paying $5000 now and $5000 in 2 years; rate is 8% compounded quarterly?<BR>\n" );
document.write( "the result: 5000 (now) + final amount (y) .... so:<BR>\n" );
document.write( "y=a(1 + r/n)^(tn)<BR>\n" );
document.write( "y=5000(1 + .08/(1/4))^((1/4)*2)<BR>\n" );
document.write( "y=5000(1.32)^(1/2)<BR>\n" );
document.write( "y=5744.56<BR>\n" );
document.write( "the result: 5000 + 5744.56 = $10,744.56<BR>\n" );
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document.write( "or by paying $3000 now, $3000 a year from now, and a final payment of x dollars in 2 years from now. Determine the amount of final payment if the interest rate is 8% compounded quarterly?<BR>\n" );
document.write( "the result: 3000 + final amount + final amount<BR>\n" );
document.write( "y=a(1 + r/n)^(tn)<BR>\n" );
document.write( "y=3000(1+.08/(1/4))^(1/4)<BR>\n" );
document.write( "y=3000(1.32)^(1/4)<BR>\n" );
document.write( "y=3215.62<BR>\n" );
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document.write( "y=a(1 + r/n)^(tn)<BR>\n" );
document.write( "y=3000(1.32)^(1/2)<BR>\n" );
document.write( "y=3446.74<BR>\n" );
document.write( "the result: 3000 + 3215.62 + 3446.74 = $9,662.36<BR>\n" );
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document.write( "If I was the person, I would choose the $3,000 deal! </SPAN>\n" );
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