Question
In: Finance
If you invest $8,600 per period for the following number of periods, how much would you...
If you invest $8,600 per period for the following number of periods, how much would you have in each of the following instances? Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods.
a. In 13 years at 6 percent? (Do not round
intermediate calculations. Round your final answer to 2 decimal
places.)
b. In 30 years at 12 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Solutions
Expert Solution
We know that the formula for future value of annuity is as follows.
P*((1+r)n - 1)/r
Where P = Equalised annual payment
n = number of periods
r = rate on interest
A) Given Time period = 13 Years, Annual interest = 6% and Annual installments = $8,600
Future value of annuity is 8600 * ((1.06)13-1)/0.06 = $162386.38
B) Given Time period = 30 Years, Annual interest = 12% and Annual installment = $8600
Future value of annuity is 8600*((1.12)30-1)/0.12 = $2075461.09
jeff jeffy answered 2 years agoRelated Solutions
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