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Compute present value of annuity

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1. Barb and John Reed want to know how much they must deposit in a retirement savings account today to have payments of $1,750 every six months for 15 years. The retirement account is paying 8% annual interest, compounded semiannually.

2. Lena Dimock is saving for her college expenses. She sets aside $200 at the beginning of each three months in an account paying 8% annual interest, compounded quarterly. How much will Lena have accumulated in the account at the end of four years?

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Semiannual rate=8%/2=4%
Use the formuala for present value of ...

Solution Summary

Provides steps necessary to computer the present value of annuity.