document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=970801>Question 970801</A>: <I><SPAN STYLE=\"word-break: break-all;\"> The steps for these types of problems continue to perplex me:\r<BR>\n" );
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document.write( "\"A business owner decided to purchase an annuity to pay for new copy machines in 6 years.  The payment is $2,850 at 8% interest compounded quarterly.  Find the future value of the annuity in 6 years.  Round your answer to the nearest cent.\" </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #593445 by </B><A HREF=/tutors/aboutme.mpl?userid=Boreal><B>Boreal(15235)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Boreal><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/cgi-bin/show-face.mpl?user=Boreal><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=593445\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> A=P{1+ .08/4}^24\r<BR>\n" );
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document.write( "This is the interest rate divided by the compounding frequency raised to the number of times compounded.  6 years at 4 times a year is where the 24 comes from.  The 8% is divided by 4 to equal the change each quarter.\r<BR>\n" );
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document.write( "$1 at 5%    after 1 year $1.05  After two years $1.05^.05 etc.  Faster compounding lessens the amount  for each time but increases the number.\r<BR>\n" );
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document.write( "A=2850{1.02}^24=$4585.05 </SPAN>\n" );
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