Question

Question 2 of 7 Andrew purchased an annuity that had an interest rate of 3.00% compounded semi-annually. It provided him with payments of $3,000 at the end of every month for 3 years. If the first withdrawal is to be made in 4 years and 1 month, how much did he pay for it? Round to the nearest cent Next Question

Answer 1

two Stages ave Guestion there -Jn this PAY cha ses amnuiky Invalved, Frsty andrew Semi awnually far Pviod That Compounded a of 31 at The Yate of That 4rived afEey the we Second used to be Pay andrew "ydars would Monthy Payments of 3000 3yearssing period op Yate 31 1tere st STEP -I Sharelet First frnad The here we Out end o 4th the outs fanding TRalance at Let the amount montaly Payment s x PVIFA fY,

monthy Payments =3000 37- Y= at is monthly Because 3 = 0-25%. Period 175 3x12 36 K3000 X PVIFA (Y-0-25 m36 PVIFA (025, m= 30) 34.366 5 1 3000 3Y-3865 = $103,159 S STEP- 2 at the end That arrived amount we Fear$l03, 1595 Thi is as Tuture Value Called

the formula Cressn Fv: P.V[I4] Value the Can find out we of annuity pUrdhese Price is which Compoundled Sem It is Y 3.1 Sin ce awnualng 3 Pesiods F.V l03,154 - pv(1+1s. 7 103, 159.5 103, 59.5 112649 103,159.5 $ 91,516-045 P.V- C.01578 Paio b andrew $91, 516.045 Price