1 answer

Many persons prepare for retirement by making monthly contributions to a savings program. Suppose that $1,700...

Question:

Many persons prepare for retirement by making monthly contributions to a savings program. Suppose that $1,700 is set aside each year and invested in a savings account that pays 8​% interest per​ year, compounded continuously.

a. Determine the accumulated savings in this account at the end of 21 years.

b. In Part​ (a), suppose that an annuity will be withdrawn from savings that have been accumulated at the EOY 21. The annuity will extend from the EOY 22 to the EOY 30. What is the value of this annuity if the interest rate and compounding frequency in Part​ (a) do not​ change?

Continuous Compounding; i = 8% Single Payment Uniform Series Compound Compound Capital Amount Present Amount Present Sinking

Continuous Compounding; i = 8% Single Payment Uniform Series Compound Compound Capital Amount Present Amount Present Sinking Fund Recovery Factor Worth Factor Factor Worth Factor Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P F/P P/F FIA PIA A/F A/P 1.0833 0.9231 1.0000 0.9231 1.0000 1.0833 1.1735 0.8521 2.0833 1.7753 0.4800 0.5633 1.2712 0.7866 3.2568 2.5619 0.3071 0.3903 1.3771 0.7261 4.5280 3.2880 0.2208 0.3041 1.4918 0.6703 5.9052 3.9584 0.1693 0.2526 1.6161 0.6188 7.3970 4.5771 0.1352 0.2185 1.7507 0.5712 9.0131 5.1483 0.1109 0.1942 1.8965 0.5273 10.7637 5.6756 0.0929 0.1762 2.0544 0.4868 12.6602 6.1624 0.0790 0.1623 2.2255 0.4493 14.7147 6.6117 0.0680 0.1512 2.4109 0.4148 16.9402 7.0265 0.0590 0.1423 2.6117 0.3829 19.3511 7.4094 0.0517 0.1350 2.8292 0.3535 21.9628 7.7629 0.0455 0.1288 3.0649 0.3263 24.7920 8.0891 0.0403 0.1236 3.3201 0.3012 27.8569 8.3903 0.0359 0.1192 3.5966 0.2780 31.1770 8.6684 0.0321 0.1154 3.8962 0.2567 34.7736 8.9250 0.0288 0.1120 4.2207 0.2369 38.6698 9.1620 0.0259 0.1091 4.5722 0.2187 42.8905 9.3807 0.0233 0.1066 4.9530 0.2019 47.4627 9.5826 0.0211 0.1044 5.3656 0.1864 52.4158 9.7689 0.0191 0.1024 5.8124 0.1720 57.7813 9.9410 0.0173 0.1006 6.2965 0.1588 63.5938 10.0998 0.0157 0.0990 6.8210 0.1466 69.8903 10.2464 0.0143 0.0976 7.3891 0.1353 76.7113 10.3817 0.0130 0.0963 8.0045 0.1249 84.1003 10.5067 0.0119 0.0952 8.6711 0.1153 92.1048 10.6220 0.0109 0.0941 9.3933 0.1065 100.7759 10.7285 0.0099 0.0932 10.1757 0.0983 110.1693 10.8267 0.0091 0.0924 11.0232 0.0907 120.3449 10.9174 0.0083 0.0916

Answers

As the table given already contains factors with 8% continuous compounding so we do not need to find effective interest rate

a. Amount in the account after 21 yrs = 1700 * (F/A, 8%, 21) = 1700 * 52.4158 = 89106.86

b. Annuity from EOY 22 to 30 = 89106.86 * (A/P, 8%,9) = 89106.86 * 0.1623 = 14462.04

.

Similar Solved Questions

1 answer
Es/172935/quizzes/741774/take a liability must be debited an expense must be credited Question 30 When an accrued...
es/172935/quizzes/741774/take a liability must be debited an expense must be credited Question 30 When an accrued liability is being paid an expense must be credited a liability must be debited e a liability must be credited an asset must be credited No new data to save. Last checked at 1:0...
1 answer
Please show how you got the answers. Prepare the journal entries to record the following transactions...
Please show how you got the answers. Prepare the journal entries to record the following transactions on Ayayai Company's books using a perpetual inventory system Your answer is correct. On March 2, Blossom Company sold £801,000 of merchandise on account to Ayayal Company, terms 2/10,n/30....
2 answers
What is Arithmetic Mean?
What is Arithmetic Mean?...
1 answer
Have you observed the use of telehealth in the clinical or nonclinical setting with any patient...
Have you observed the use of telehealth in the clinical or nonclinical setting with any patient population? How would telehealth improve the quality of patient care, patient outcomes, and/ or patient satisfaction? How would telehealth impact nursing practice?...
1 answer
Question text Which of the following statements about convertibles is most CORRECT? Select one: a. Investors...
Question text Which of the following statements about convertibles is most CORRECT? Select one: a. Investors are willing to accept a lower interest rate on a convertible than on otherwise similar straight debt because convertibles are less risky than straight debt. b. At the time it is issued, a con...
1 answer
List all the possible products formed, following the Crossed Aldol Addition process listed below
List all the possible products formed, following the Crossed Aldol Addition process listed below We were unable to transcribe this image.6 A Crossed Aldol Addition (forms 4 products) он H20 O A CH CH3 но OH H2O H20 но CH CH3 BA он H2o "H - Ho CH...
1 answer
A.) Gant Accounting performs two types of services, Audit and Tax. Gant's overhead costs consist of...
a.) Gant Accounting performs two types of services, Audit and Tax. Gant's overhead costs consist of computer support, $300,000 (with a cost driver of CPU minutes); and legal support, $150,000 (with a cost driver of Legal hours used). Information on the two services is: Audit Tax D...
1 answer
1. (3 points) True or False (Circle your answers in the box below) (a) (b) (C)...
1. (3 points) True or False (Circle your answers in the box below) (a) (b) (C) True True True False False False (a) COPhp = COPR + 1 for fixed values of Quand QH. (b) The entropy transfer associated with heat transfer is always greater than zero. (c) An isentropic process is also isothermal if the w...
1 answer
-29.63 A 23.4 L sample of phosphine has a pressure of 17 torr at -4 °C....
-29.63 A 23.4 L sample of phosphine has a pressure of 17 torr at -4 °C. What mass of PHs gas is present? 16)...
1 answer
Use the References to access important values if needed for this question. (1) Write a net...
Use the References to access important values if needed for this question. (1) Write a net ionic equation for the reaction between H2SO3(aq) and HPO (aq) that shows H2SO3(aq) behaving as a Bronsted-Lowry acid. BL acid BL base BL base BL acid (2) Decide which would be favored at equilibrium for this ...
1 answer
In laminar flow, how are pressure, P, and flow rate, Q, related? a. P and Q...
In laminar flow, how are pressure, P, and flow rate, Q, related? a. P and Q are inversely related b. P and Q are directly (linearly) related c. P and Q are equal d. P and Q are not related...
1 answer
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December...
Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Unit Cost Units 1,970 $6 Inventory, December 31, prior year For the current year: Purchase, March 21...
1 answer
Need help a) For the system of equations given, partially row reduce the coefficient matrix in...
need help a) For the system of equations given, partially row reduce the coefficient matrix in the following careful way: *1 + 2yı - 24 = 5 4x1 +9yı - 321 = 8 (5x, +12yı - 324 = 1 Stage 1: just reduce the matrix first to an upper triangular form U and leave pivot entries as they ar...
1 answer
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls...
Werner Chemical, Inc., leased a protein analyzer on September 30, 2018. The five-year lease agreement calls for Werner to make quarterly lease payments of $414,386, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2018. Werner's incremental borro...
1 answer
A laser emitted a 0.1 ms long pulse of light with total energy 10 J. The...
A laser emitted a 0.1 ms long pulse of light with total energy 10 J. The average pressure of such a pulse focused on a spot of diameter 1mm on a fully reflective surface is: A. 850 Pa B. 0.17 mN C. 6.6 N/m2 D. None of the above...
1 answer
3. A Mercedes-Benz 300SL (m1700 kg) is parked on a road that ises 15° above the...
3. A Mercedes-Benz 300SL (m1700 kg) is parked on a road that ises 15° above the horizontal. What are the magnitudes of (a) the normal and (b) the static frictional force that the ground exerts on the tires? the mo 53. s force h due n orce...
1 answer
Most older adults are not impaired, but are functional in the community, thereby benefitting from health-oriented interv...
Most older adults are not impaired, but are functional in the community, thereby benefitting from health-oriented interventions. As a nurse you are responsible for educating, promoting health and preventing illness.  Give a nursing action for each of the areas of concern when caring for th...