Mathematics
Calculus With Applications
Sara Swangard wants to deposit $12,000 at the end of

Sara Swangard wants to deposit $12,000 at the end of each year for 9 years into an annuity. a. Saras

Question:

Sara Swangard wants to deposit $12,000 at the end of each year for 9 years into an annuity.

a. Sara’s local bank offers an account paying 5% interest compounded annually. Find the final amount she will have on deposit.

b. Sara’s brother-in-law works in a bank that pays 3% compounded annually. If she deposits her money in this bank instead, how much money will she have in her account?

c. How much would Sara lose over 9 years by using her brother-in-law’s bank instead of her local bank?

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To solve this problem we can use the future value of an annuity formula FV Pmt 1 r n 1 r W…View the full answer

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