Learning Objectives
By the end of this section, you will be able to:
- Use summation notation.
- Use the formula for the sum of the first [latex]n[/latex] terms of an arithmetic series.
- Use the formula for the sum of the first [latex]n[/latex] terms of a geometric series.
- Use the formula for the sum of an infinite geometric series.
- Solve annuity problems.
A couple decides to start a college fund for their daughter. They plan to invest $50 in the fund each month. The fund pays 6% annual interest, compounded monthly. How much money will they have saved when their daughter is ready to start college in 6 years? In this section, we will learn how to answer this question. To do so, we need to consider the amount of money invested and the amount of interest earned.