Use Table 12-2 *I am having trouble understanding how to get the answer. I always come up with something different. I am must round to the nearest cent* Steven Combs is the grand prize winner in a college tuition essay contest.He will receive $7,000 at the beginning of each year for the next 5 years.How much (in $) should be invested at 8% interest compounded annually to award the prize? TABLE 12-2 Present Value (Amount) of an Ordinary Annuity of $1Periods1234567891011121.31415161718192021222324252627282930313233343536234567891011121314151617181920212223241%0.99502 0.99010TABLE 12-2 Present Value (Amount) of an Ordinary Annuity of $1 (Continued)Periods 9% 10%0.91743 0.9090911.75911 1.735542.53129 2.486853.23972 3.169873.88965 3.7907925The values in Table 12-2 were generated by the formula+and rounded to five decimal places, where i is the interest*(1 +0rate per period and is the total number of periods.2627282930← 2%0.98522 0.980391.98510 1.97040 1.95588 1.941562.97025 2.94099 2.91220 2.383883.55050 3.90197 3.85438 3.807734.92587 4.85343 4.78264 4.7134631323365.89638 5.79548 5.69719 5.60143 541719 5.24214 5.07569 4.91732 4.76654 4.62288 96.86207 6.72319 6.50821 6.47199 6.23023 6.00205 5.78637 5.58238 5.38029 5.2063777.82296 7.65168 7.48593 732548 7.01969 673274 646321 6.20979 5.97130 5.746648.77905 3.56602 3.36052 3.16224 7.78611 743533 7.10782 6.80169 6.51523 6245899.73041 9.47130 9.22218 8.98259 8.53020 8.110907.72171 7.36009 7.02358 6710088.11090 7.7217315.33993 14.7178716.25863 15.5622517.17277 16.3982718.08236 17.2260118.98742 18.0455514.1312614.9076515.67256164261717.16864118.863251067708 10.36763 10.07112 9.78685 9.25262 8.76048 8.30541 7.83687 7.49867 7.1330611.61898 11.25508 10.90751 10.57534 9.95400 9.385078.38384 7.94269 7.53608 121255615 1213374 11.73153 11.34837 10.63496 9.98565 9.30357 8.85258 8.35765 7.90378 1313.48871 13.00370 1254338 1210625 11.29607 10.56312 9.89864 9.29498 8.745478.74547 8.24424 1414.41662 13.86505 13.34323 1284926 11.93794 11.11839 10.37966 9.71225 9.10791 8.55948 153% 4% 5% 6% 7% 8% Periods0.97087 0.96154 0.55238 0.94340 0.93458 0.92593 11.91347 1.85509 1.85941 1.83339 1.80802 1.78326 22.32861 2.77509 2.72325 2.67301 2.62432 2577103.71710 3.62990 3.54595 3.46511 3.38721 3.31213 4457971 4.45182 432948 4.21236 4.10020 3.99271 538913.57771 1256110 11.65230 10.83777 10.10590 9.44665 8.85137 1614.29187 13.16612 1216567 11.27407 10.47726 9.76322 9.12164 1714.99203 13.75351 1265930 11.68959 10.32760 10.05909 9.37189 1815.67846 14.32380 13.13394 12.08532 11.15812 10.33560 9.60360 1916.35143 14.87747 13.59033 12.4622111.46992 10.59401 9.81815 2019.38798 18.85698 17.90014 17.01121 15.41502 14.02916 12.82115 11.76406 10.33553 10.01680 2120.78406 19.66038 1862082 17.65805 15.03602 1445112 13.16300 12.04158 11.06124 10.20074 2221.67568 20.45532 1933036 18.29220 16.44361 1485684 13.48857 12.30338 11.27219 10.37106 232256287 21.24339 20.03041 18.91393 1693554 15.24696 13.79864 12.55036 1146033 10.52876 2423.44564 2202316 20.71961 19.52346 17.41315 15.62208 14.09394 12.78336 11.65358 10.67478 251024.32402 2279520 21.39863 20.12104 17.87684 15.98277 14.37519 13.00317 11.32578 10.30996 2625.19803 23.55961 22.06762 20.70690 18.32703 16.32959 14.64303 13.21053 11.98671 10.93516 2726.06769 2431644 22.72672 21.28127 18.76411 16.66306 14.39813 13.40616 12.13711 11.05108 2326.93302 25.06379 23.37608 21.84438 19.18845 16.98371 15.1410727.79405 25 80771 24.01584 2239646 19.60044 17.29203 153724513.59072 12.27767 11.15841 2913.76483 12.40904 11.25778 3023.65080 2654229 24.64615 2293770 20.00043 1758849 1559281 13.92909 12.53181 1134980 3129.50328 27.26059 25.26714 23.46833 20.38877 17.37355 15.30268 14.08404 12.64656 11.43500 3230.35153 27.98969 25.37895 23.98856 20.76579 18.14765 16.00255 14.23023 1275379 11.51399 3331.19555 28.70267 26.43173 24.49859 21.13184 18.41120 16.192903203537 29.40858 27.07559 24.99862 21.43722 18.66461 16.37419 14.49825 1294767 11.65457 353287102 30.10751 27.66068 25.48884 21.83225 18.90828 16.54635 14.62099 13.03521 11.71719 3614.36814 1285401 11.58693 3415% 16% 17% 18% Periods0.86057 0.86207 0.85470 08474611% 12% 13% 14%0.90090 0.89286 0.88496 0.8771911.71252 1.69005 1.66810 1.64666 1.62571 1.60523 1.58521 1.56564 22.44371 240183 2.36115 2.32163 228323 2.24589 2.20958 217427 32.97447 2.91371 2.85498 2.79818 274324 269006 43.51723 3.43308 3.352163.27429 3.19935 3.12717 53.99755 3.88867 3.78448 3.68474 3.58918 3.49760 64.71220 4.36376 4.42261 4.28830 4.16042 4.03857 3.92238 3.81153 75.14612 4.96764 4.79877 4.63886 4.48732 4.34359 4.20716 4.07757 85.53705 5.32825 5.13166 4.94637 4.771.58 4.60654 4.45057 4.30002641766614457 5.88923 5.65022 5.42624 521612 501877 4.83323 4.65860 4.494093.10245 3.037353.69590 3.604784.48592 4.35526 4.23054 4.111415.03295 4.868425.53482 5.334935.99525 5.759029680519 649506 620652 5.937707.16073 6.81369 6.49236 6.194377.48690 7.103367.78615 7.366698.06069 7.6060811125.68674 5.45273 5.23371 5.02864 4.83641 4.656015.91765 5.66029 542062 5.19711 4.98839 4.793226.74987 6.42355 6.12181 5.84236 5.58315 5.34233 5.11828 4.909516.98187 6.62817 6.30049 6.00007 5.72448 546753 5.22930 5.008067.19087 681086 646238 6.14217 584737 557546 5.32419 5.09158 1513149.29224 864869 807507944243 8.77154 8.17574108.31256 7.82371 7.37916 6.973998.54363 8.02155 754879 7.119637.249677.36578 6.93797 6.55037 6.19823 5.87746 5.58449 5.31624 195.92884 5.62777 5.35275 206.60388 6.26506 5.95423 5.66850 5.40529 5.16235 166.72909 6.37286 6.04716 5.74870 547461 5.22233 176.83991 6.46742 6.12797 5.81785 5.53385 5.27316 188.75563 8.20141 7.701628.95011 836492 7839299.12855 8.51356 7.963337.46944 7012475 6.62313 6.259337.56200 7.10155 6.68696 6.31246 5.97314 5.66476 5.38368 217.64465 7.16951 6.74294 6.35866 601133 5.69637 5.40990 229.58021 888322 8.26643 7.71843 7.22966 6.79206 6.39884 604425 5.72340 543212 239.70661 898474 8.34814 7.78432 7.28288 683514 6.43377 6.07263 5.74649 5.45095 247.84314 732998 6.87293 6464159.82258 9.07704 8421746.09709 5.76623 546691 259.92897 9.160958.48806 7.89566 737167 6.90608 6.49056 6.11818 5.78311 5.48043 2610.00658 9.23722 8.54780 7.94255 7.40856 6.93515 6.51353 6.13636 5.79753 5.49189 2710.11613 9.30657 8.601628.60162 7.98442 7.44120 6.96066 6.53351 6.15204 5.80985 5.5016010.19828 9.36961 8.65011 8.02181 7.47009 6.98304 6.55088 6.16555 5.82039 5.50983 29EMEL6.56598 6.17720 5.82939 5.516812810.27365 9.42691 8.693798.05518 7.49565 7.0026630313210.34280 947901 8.73315 8.08499 7.31828 7.01988 657911 6.18724 5.83709 5.5227210.40624 9.52638 8.76860 8.111.59 753830 7.05498 659053 6.19590 5.843665.5277310.46444 9.56943 880054 8.13535 755602 7.04823 6.60046 6.20336 5.84928 553197 3310.51784 9.60857 8.82932 8.15656 7.57170 7.05985 6.60910 6.20979 5.85409 5.535573435 10.56682 9.64416 8.85524 8.17550 7.58557 7.070056.61661621534 5.85820 5.53862 3510.61176 9.67651 887859 8.19241 7.59785 7.078997.07899 6.62314 6.22012 5.86171 5.54120 363436

Question

Use Table 12-2 *I am having trouble understanding how to get the answer. I always come up with something different. I am must round to the nearest cent* Steven Combs is the grand prize winner in a college tuition essay contest.He will receive $7,000 at the beginning of each year for the next 5 years.How much (in $) should be invested at 8% interest compounded annually to award the prize? TABLE 12-2 Present Value (Amount) of an Ordinary Annuity of $1Periods1234567891011121.31415161718192021222324252627282930313233343536234567891011121314151617181920212223241%0.99502 0.99010TABLE 12-2 Present Value (Amount) of an Ordinary Annuity of $1 (Continued)Periods 9% 10%0.91743 0.9090911.75911 1.735542.53129 2.486853.23972 3.169873.88965 3.7907925The values in Table 12-2 were generated by the formula+and rounded to five decimal places, where i is the interest*(1 +0rate per period and is the total number of periods.2627282930← 2%0.98522 0.980391.98510 1.97040 1.95588 1.941562.97025 2.94099 2.91220 2.383883.55050 3.90197 3.85438 3.807734.92587 4.85343 4.78264 4.7134631323365.89638 5.79548 5.69719 5.60143 541719 5.24214 5.07569 4.91732 4.76654 4.62288 96.86207 6.72319 6.50821 6.47199 6.23023 6.00205 5.78637 5.58238 5.38029 5.2063777.82296 7.65168 7.48593 732548 7.01969 673274 646321 6.20979 5.97130 5.746648.77905 3.56602 3.36052 3.16224 7.78611 743533 7.10782 6.80169 6.51523 6245899.73041 9.47130 9.22218 8.98259 8.53020 8.110907.72171 7.36009 7.02358 6710088.11090 7.7217315.33993 14.7178716.25863 15.5622517.17277 16.3982718.08236 17.2260118.98742 18.0455514.1312614.9076515.67256164261717.16864118.863251067708 10.36763 10.07112 9.78685 9.25262 8.76048 8.30541 7.83687 7.49867 7.1330611.61898 11.25508 10.90751 10.57534 9.95400 9.385078.38384 7.94269 7.53608 121255615 1213374 11.73153 11.34837 10.63496 9.98565 9.30357 8.85258 8.35765 7.90378 1313.48871 13.00370 1254338 1210625 11.29607 10.56312 9.89864 9.29498 8.745478.74547 8.24424 1414.41662 13.86505 13.34323 1284926 11.93794 11.11839 10.37966 9.71225 9.10791 8.55948 153% 4% 5% 6% 7% 8% Periods0.97087 0.96154 0.55238 0.94340 0.93458 0.92593 11.91347 1.85509 1.85941 1.83339 1.80802 1.78326 22.32861 2.77509 2.72325 2.67301 2.62432 2577103.71710 3.62990 3.54595 3.46511 3.38721 3.31213 4457971 4.45182 432948 4.21236 4.10020 3.99271 538913.57771 1256110 11.65230 10.83777 10.10590 9.44665 8.85137 1614.29187 13.16612 1216567 11.27407 10.47726 9.76322 9.12164 1714.99203 13.75351 1265930 11.68959 10.32760 10.05909 9.37189 1815.67846 14.32380 13.13394 12.08532 11.15812 10.33560 9.60360 1916.35143 14.87747 13.59033 12.4622111.46992 10.59401 9.81815 2019.38798 18.85698 17.90014 17.01121 15.41502 14.02916 12.82115 11.76406 10.33553 10.01680 2120.78406 19.66038 1862082 17.65805 15.03602 1445112 13.16300 12.04158 11.06124 10.20074 2221.67568 20.45532 1933036 18.29220 16.44361 1485684 13.48857 12.30338 11.27219 10.37106 232256287 21.24339 20.03041 18.91393 1693554 15.24696 13.79864 12.55036 1146033 10.52876 2423.44564 2202316 20.71961 19.52346 17.41315 15.62208 14.09394 12.78336 11.65358 10.67478 251024.32402 2279520 21.39863 20.12104 17.87684 15.98277 14.37519 13.00317 11.32578 10.30996 2625.19803 23.55961 22.06762 20.70690 18.32703 16.32959 14.64303 13.21053 11.98671 10.93516 2726.06769 2431644 22.72672 21.28127 18.76411 16.66306 14.39813 13.40616 12.13711 11.05108 2326.93302 25.06379 23.37608 21.84438 19.18845 16.98371 15.1410727.79405 25 80771 24.01584 2239646 19.60044 17.29203 153724513.59072 12.27767 11.15841 2913.76483 12.40904 11.25778 3023.65080 2654229 24.64615 2293770 20.00043 1758849 1559281 13.92909 12.53181 1134980 3129.50328 27.26059 25.26714 23.46833 20.38877 17.37355 15.30268 14.08404 12.64656 11.43500 3230.35153 27.98969 25.37895 23.98856 20.76579 18.14765 16.00255 14.23023 1275379 11.51399 3331.19555 28.70267 26.43173 24.49859 21.13184 18.41120 16.192903203537 29.40858 27.07559 24.99862 21.43722 18.66461 16.37419 14.49825 1294767 11.65457 353287102 30.10751 27.66068 25.48884 21.83225 18.90828 16.54635 14.62099 13.03521 11.71719 3614.36814 1285401 11.58693 3415% 16% 17% 18% Periods0.86057 0.86207 0.85470 08474611% 12% 13% 14%0.90090 0.89286 0.88496 0.8771911.71252 1.69005 1.66810 1.64666 1.62571 1.60523 1.58521 1.56564 22.44371 240183 2.36115 2.32163 228323 2.24589 2.20958 217427 32.97447 2.91371 2.85498 2.79818 274324 269006 43.51723 3.43308 3.352163.27429 3.19935 3.12717 53.99755 3.88867 3.78448 3.68474 3.58918 3.49760 64.71220 4.36376 4.42261 4.28830 4.16042 4.03857 3.92238 3.81153 75.14612 4.96764 4.79877 4.63886 4.48732 4.34359 4.20716 4.07757 85.53705 5.32825 5.13166 4.94637 4.771.58 4.60654 4.45057 4.30002641766614457 5.88923 5.65022 5.42624 521612 501877 4.83323 4.65860 4.494093.10245 3.037353.69590 3.604784.48592 4.35526 4.23054 4.111415.03295 4.868425.53482 5.334935.99525 5.759029680519 649506 620652 5.937707.16073 6.81369 6.49236 6.194377.48690 7.103367.78615 7.366698.06069 7.6060811125.68674 5.45273 5.23371 5.02864 4.83641 4.656015.91765 5.66029 542062 5.19711 4.98839 4.793226.74987 6.42355 6.12181 5.84236 5.58315 5.34233 5.11828 4.909516.98187 6.62817 6.30049 6.00007 5.72448 546753 5.22930 5.008067.19087 681086 646238 6.14217 584737 557546 5.32419 5.09158 1513149.29224 864869 807507944243 8.77154 8.17574108.31256 7.82371 7.37916 6.973998.54363 8.02155 754879 7.119637.249677.36578 6.93797 6.55037 6.19823 5.87746 5.58449 5.31624 195.92884 5.62777 5.35275 206.60388 6.26506 5.95423 5.66850 5.40529 5.16235 166.72909 6.37286 6.04716 5.74870 547461 5.22233 176.83991 6.46742 6.12797 5.81785 5.53385 5.27316 188.75563 8.20141 7.701628.95011 836492 7839299.12855 8.51356 7.963337.46944 7012475 6.62313 6.259337.56200 7.10155 6.68696 6.31246 5.97314 5.66476 5.38368 217.64465 7.16951 6.74294 6.35866 601133 5.69637 5.40990 229.58021 888322 8.26643 7.71843 7.22966 6.79206 6.39884 604425 5.72340 543212 239.70661 898474 8.34814 7.78432 7.28288 683514 6.43377 6.07263 5.74649 5.45095 247.84314 732998 6.87293 6464159.82258 9.07704 8421746.09709 5.76623 546691 259.92897 9.160958.48806 7.89566 737167 6.90608 6.49056 6.11818 5.78311 5.48043 2610.00658 9.23722 8.54780 7.94255 7.40856 6.93515 6.51353 6.13636 5.79753 5.49189 2710.11613 9.30657 8.601628.60162 7.98442 7.44120 6.96066 6.53351 6.15204 5.80985 5.5016010.19828 9.36961 8.65011 8.02181 7.47009 6.98304 6.55088 6.16555 5.82039 5.50983 29EMEL6.56598 6.17720 5.82939 5.516812810.27365 9.42691 8.693798.05518 7.49565 7.0026630313210.34280 947901 8.73315 8.08499 7.31828 7.01988 657911 6.18724 5.83709 5.5227210.40624 9.52638 8.76860 8.111.59 753830 7.05498 659053 6.19590 5.843665.5277310.46444 9.56943 880054 8.13535 755602 7.04823 6.60046 6.20336 5.84928 553197 3310.51784 9.60857 8.82932 8.15656 7.57170 7.05985 6.60910 6.20979 5.85409 5.535573435 10.56682 9.64416 8.85524 8.17550 7.58557 7.070056.61661621534 5.85820 5.53862 3510.61176 9.67651 887859 8.19241 7.59785 7.078997.07899 6.62314 6.22012 5.86171 5.54120 363436

Accepted Answer

In the question you are given that the payments are made at the beginning of the year. That means…

Steven Combs is the grand prize winner in a college tuition essay contest. He will receive $7,000 at the beginning of each year for the next 5 years. How much (in $) should be invested at 8% interest compounded annually to award the prize?