   Chapter 13.4, Problem 7E ### Algebra and Trigonometry (MindTap ...

4th Edition
James Stewart + 2 others
ISBN: 9781305071742

#### Solutions

Chapter
Section ### Algebra and Trigonometry (MindTap ...

4th Edition
James Stewart + 2 others
ISBN: 9781305071742
Textbook Problem

# APPLICATIONSAnnuity Find the amount of an annuity that consists of 16 quarterly payments of $300 each into an account that pays 8 % interest p e r y e a r , compounded quarterly. To determine To find: The amount of an annuity consisting of 16 quarterly payments of$300 each into an account that pays 8% interest peryear, compounded quarterly.

Explanation

Given:

The interest per year is,

i=8%

Number of quarterly payments is,

n=16

The payment R is,

R=\$300

Approach:

The amount Af of an annuity consisting of n regular payments of size R with interest rate i per time period is given by,

Af=R(1+i)n1i ... (1)

Calculation:

The interest per year compounded quarterly is given by,

i=0

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