An annuity pays $47 per year for 22 years. What is the future value (FV) of this annuity at the end of those 22 years, given that the discount rate is 8%?

Select one:

$3649.06

$3127.76

$2606.47

$1563.88

Expert Solution

Future value of Annuity = Annual Payment * FVAF(r, n)

= 47 * FVAF(8%, 22)

= 47 * [ 1.08 + 1.08² + 1.08³ + ..... + 1.08²² ]

= 47 * 55.4568

= $ 2606.47 Answer

jeff jeffy answered 2 years ago

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