Find the Future Value of an ordinary annuity that pays $600 per year for 5 years...

Find the Future Value of an ordinary annuity that pays $600 per year for 5 years at 4%. Compounding occurs once a year.

		$2,187.31
		$3,249.79
		$729.99
		$2,671.10
		$2,586.08

Solutions

Expert Solution

Future Value of ordinary Annuity = A ((1+r)ⁿ/r)

Where A = periodic payment = $600

r = rate interest = 4% pa compounded annually

n = period

=$600*((1+.04)⁵-1)/.04)

=$600*5.416

=$3249.79

jeff jeffy answered 2 years ago

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