document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1172746>Question 1172746</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Suppose Jorge Otero has set up an annuity due with a certain credit union. At the beginning of each month, $130 is electronically debited from his checking account and placed into a savings account earning 6% interest compounded monthly. What is the value (in $) of Jorge's account after 17 months? (Round your answer to the nearest cent.)\r<BR>\n" );
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document.write( "I used this formula: FV (annuity due) = payment x (1+i)^n-1/i x (1+i) </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #797974 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><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=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=797974\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> the future value of an annuity with beginning of time period payments formula that i have is:\r<BR>\n" );
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document.write( "FUTURE VALUE OF AN ANNUITY WITH BEGINNING OF TIME PERIOD PAYMENTS\r<BR>\n" );
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document.write( "f = ((a*((1+r)^n-1))/r)*(1+r)\r<BR>\n" );
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document.write( "f is the future value of the annuity.<BR>\n" );
document.write( "a is the annuity.<BR>\n" );
document.write( "r is the interest rate per time period.<BR>\n" );
document.write( "n is the number of time periods\r<BR>\n" );
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document.write( "your formula is:\r<BR>\n" );
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document.write( "FV (annuity due) = payment x (1+i)^n-1/i x (1+i)\r<BR>\n" );
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document.write( "the following inputs are being used.\r<BR>\n" );
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document.write( "payment at the beginning of each time period = 130<BR>\n" );
document.write( "interest rate per time period = .06 per year / 12 = .005 per month.<BR>\n" );
document.write( "number of months = 17\r<BR>\n" );
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document.write( "with my formula:\r<BR>\n" );
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document.write( "f = ((a*((1+r)^n-1))/r)*(1+r) becomes:<BR>\n" );
document.write( "f = ((130*((1+.005)^17-1))/.005)*(1+.005) = 2312.152429.\r<BR>\n" );
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document.write( "with your formula:\r<BR>\n" );
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document.write( "FV (annuity due) = payment x (1+i)^n-1/i x (1+i) becomes:<BR>\n" );
document.write( "FV = 130 * (1 + .005) ^ 17 - 1 / .005 * (1 + .005)<BR>\n" );
document.write( "there are parentheses missing that will not get you the right answer.<BR>\n" );
document.write( "i provides the parentheses required below:]<BR>\n" );
document.write( "FV = 130 * ((1 + .005) ^ 17 - 1) / .005 * (1 + .005) = 2312.152429\r<BR>\n" );
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document.write( "these parentheses are very important.<BR>\n" );
document.write( "one small mistake can throw the answer off big time.\r<BR>\n" );
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document.write( "i also confirmed through the use of a financial calculator.<BR>\n" );
document.write( "the answer is the same.<BR>\n" );
document.write( "the calculator uses the percent rate rather than the rate.<BR>\n" );
document.write( "percent rate = 100 * rate.<BR>\n" );
document.write( "rate = percent rate / 100<BR>\n" );
document.write( "the results of using that calculator are shown below.<BR>\n" );
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document.write( " </SPAN>\n" );
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