Question: A = P (1 + r) (nt) ? 1. Let m=nt. Let R be the payment per period. If the principle P is the total

A = P (1 + r)^(nt)

^?1. Let m=nt. Let R be the payment per period. If the principle P is the total amount of money invested, briefly explain why R=P/m. Hint: P is the total amount and m is number of compoundings.

A = P (1 + r) (nt) ?1. Let m=nt. Let R

NAME: 1.3. Imagine you make a payment with k compoundings left. What is the future value of this one individual payment? Hint: Use the compound interest formula. Think of P in that formula as R. How many compounds are left? 1.4. Let i = r. Briefly explain why, because of your last answer, the future value A of an ordinary annuity is: A = R + R(1 i) + R(1+92 + + R(1+i)m-1

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