SOLUTION: What is the present value of an annuity that earns interest at 4.5% compounded quarterly and pays out $1,000 quarterly for 10 years? Round to the nearest cent. Explain to me thi

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Question 1178716: What is the present value of an annuity that earns interest at 4.5% compounded quarterly and pays out $1,000 quarterly for 10 years? Round to the nearest cent.
Explain to me this problem step-by step
Found 2 solutions by MathLover1, MathTherapy:
Answer by MathLover1(20849) About Me  (Show Source):
You can put this solution on YOUR website!

A+=+P%281+%2B+r%2Fn%29%5E%28nt%29
First, convert R as a percent to+r as a decimal
r+=+R%2F100
r+=+4.5%2F100
r+=+0.045 rate per year,
n=4%2A10
Then solve the equation for A
A+=+P%281+%2B+r%2Fn%29%5E%28nt%29
A+=+1000.00%281+%2B+0.045%2F4%29%5E%284%2A10%29
A+=+1000.00%281+%2B+0.01125%29%5E%2840%29
A+=+1564.38
Summary:
The total amount accrued, principal plus interest, with compound interest on a principal of $1000.00 at a rate of 4.5% per year compounded 4 times per year over 10 years is $1564.38.


Answer by MathTherapy(10552) About Me  (Show Source):
You can put this solution on YOUR website!

What is the present value of an annuity that earns interest at 4.5% compounded quarterly and pays out $1,000 quarterly for 10 years? Round to the nearest cent.
Explain to me this problem step-by step
Correct answer: highlight%28%22%2432%2C068.25%22%29