document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1202634>Question 1202634</A>: <I><SPAN STYLE=\"word-break: break-all;\"> No technology is required for this question.\r<BR>\n" );
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document.write( "a) Which annuity formula - Present Value or Future Value - more closely resembles the geometric series formula? Explain.\r<BR>\n" );
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document.write( "b) Why is an annuity an example of a geometric series? Explain.\r<BR>\n" );
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document.write( "c) Why can we not model compound interest with the geometric series formula?. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #837636 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=837636\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> i believe the future value equation closely resembles the geometric series equation.<BR>\n" );
document.write( "as an example:<BR>\n" );
document.write( "assume 1000 is inveted at the end of each month for 20 years at an interest rate of 10% per year.<BR>\n" );
document.write( "the future value of the annuity will be equal to 57274.99949.<BR>\n" );
document.write( "the sum of the geometric formula for the same problem will be:<BR>\n" );
document.write( "Sn = 1000 * (1 - 1.1^20) / (1 - 1.1) = 57274.99949<BR>\n" );
document.write( "they're the same.\r<BR>\n" );
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document.write( "answers to your questions:\r<BR>\n" );
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document.write( "a) Which annuity formula - Present Value or Future Value - more closely resembles the geometric series formula? Explain.\r<BR>\n" );
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document.write( "the future value of an annuity formula most closely resembles the sum of a geometric series formula.\r<BR>\n" );
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document.write( "b) Why is an annuity an example of a geometric series? Explain.\r<BR>\n" );
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document.write( "they do the same thing.<BR>\n" );
document.write( "they both take the annuity and multiiply it by the growth factor.<BR>\n" );
document.write( "they then add up the annuity for the numbe of time periods to get the future value.<BR>\n" );
document.write( "in the sum of a geometric series formula, A1 is the annuity.\r<BR>\n" );
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document.write( "c) Why can we not model compound interest with the geometric series formula?.\r<BR>\n" );
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document.write( "we can model compound interest with the geometric series formula.<BR>\n" );
document.write( "they're related.<BR>\n" );
document.write( "some modifications need to be considered to make them provide the same answer, but they do provide the same answer if the parameters of the formulas are modified correctly.\r<BR>\n" );
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document.write( "if you need a more detailed explanation, let me know what more you need.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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