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A person makes annual payments of $1,000 into an ordinary annuity. At the end of 5 years, the amount in the annuity is $5,840. What annual nominal compounding rate has this Annuity earned?

A person makes annual payments of $1,000 into an ordinary annuity. At the end of 5 years, the amount in the annuity is $5,840. What annual nominal compounding rate has this Annuity earned?
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Compounding
Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will...

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College Mathematics For Business Economics, Life Sciences, And Social Sciences

College Mathematics For Business Economics, Life Sciences, And Social Sciences

ISBN: 978-0134674148

14th Edition

Authors: Raymond Barnett, Michael Ziegler, Karl Byleen, Christopher Stocker

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Posted Date: March 28, 2018 07:46:05
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