document.write( "Question 1152996: You deposit $2500.00 into a savings plan at the end of each year for 3 years. The interest rate is 9.1% per year compounded annually. Find the value of annuity and the interest gained. Please show me in annuities formula.
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Algebra.Com's Answer #775147 by ikleyn(52879) $\"\"$ $\"About$

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document.write( "It is a classic Ordinary Annuity saving plan. The general formula is \r\n" );
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document.write( "    FV = ,    (1)\r\n" );
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document.write( "where  FV is the future value of the account;  P is your annual payment (deposit); r is the annual percentage rate presented as a decimal; \r\n" );
document.write( "n is the number of deposits (= the number of years, in this case).\r\n" );
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document.write( "Under the given conditions, P = 2500;  r = 0.091;  n = 3.  So, according to the formula (1), you get at the end of the 3-th year\r\n" );
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document.write( "    FV =  = $8203.20.\r\n" );
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document.write( "Note that you deposit only  3*$2500 = $7500.  The rest, 8203.20 - 7500.00 = 703.20, is the interest \r\n" );
document.write( "that your account earns/accumulates in 3 years.\r\n" );
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\n" ); document.write( "\n" ); document.write( "On Ordinary Annuity saving plans, see the lessons\r
\n" ); document.write( "\n" ); document.write( " - Ordinary Annuity saving plans and geometric progressions\r
\n" ); document.write( "\n" ); document.write( " - Solved problems on Ordinary Annuity saving plans\r
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\n" ); document.write( "\n" ); document.write( "The lessons contain EVERYTHING you need to know about this subject, in clear and compact form.\r
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\n" ); document.write( "\n" ); document.write( "When you learn from these lessons, you will be able to do similar calculations in semi-automatic mode.\r
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