Question
Asked By CelestialDreamer51 at
Answered By Expert
Earl
Expert · 3.7k answers · 3k people helped
Solution By Steps
Step 1: Identify the formula for the accumulated sum of an annuity
The formula to calculate the future value of an annuity is:
FV = P imes \left( \frac{(1 + r)^n - 1}{r} \right)
where
P is the periodic payment,
r is the interest rate per period, and
n is the number of periods.
Step 2: Substitute the given values into the formula
Given:
P = 2587
r = 0.075
n = 15
Substitute these values into the formula:
FV = 2587 imes \left( \frac{(1 + 0.075)^{15} - 1}{0.075} \right)
Step 3: Calculate the compound factor
Calculate
(1 + 0.075)^{15}:
(1.075)^{15} \approx 2.961
Step 4: Calculate the numerator of the fraction
2.961 - 1 = 1.961
Step 5: Divide by the interest rate
\frac{1.961}{0.075} \approx 26.147
Step 6: Multiply by the periodic payment
2587 imes 26.147 \approx 67632.289
Final Answer
The accumulated sum of the stream of payments is approximately $67,632.29.
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