Problem

Julie receives a check for $\$ 5000$ at the end of every year as part of an inheritance. She deposits it into an annuity at an annual rate of $2.8 \%$ compounded continuously. How much will her annuity be worth at the end of 6 years? Round your answer to the nearest dollar and do not use commas in the answer blank. \$[ans1]

Solution

Step 1 :Calculate the accumulated amount for each deposit using the formula \( A = P \cdot e^{rt} \)

Step 2 :Since the annual deposit is \( \$5000 \), the annual rate is \( 2.8\% \) or \( 0.028 \) as a decimal, and the time is 6 years, calculate the total amount for each year separately

Step 3 :For the first deposit, the time is 6 years, so the accumulated amount is \( 5000 \cdot e^{0.028 \cdot 6} \)

Step 4 :For the second deposit, the time is 5 years, so the accumulated amount is \( 5000 \cdot e^{0.028 \cdot 5} \)

Step 5 :Continue this process for each subsequent deposit, decreasing the time by 1 year each time, until the last deposit which is for 1 year

Step 6 :Sum up the accumulated amounts for all deposits to get the total amount at the end of 6 years

Step 7 :Round the final answer to the nearest dollar

Step 8 :\( \boxed{32212} \)

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Source: https://solvelyapp.com/problems/Nhh45LBwVj/

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