Find the amount of an ordinary annuity for 6 years of semiannually payments of $1,400 that...

Find the amount of an ordinary annuity for 6 years of semiannually payments of $1,400 that earn interest at 8%/year compounded semi-annually.

a. $26,567.98

b. $2,241.45

c. $9,286.17

d. $21,036.13

Solutions

Expert Solution

Future value of an ordinary annuity:

Where,
FVA = Future Value of Annuity
A = Annuity or payments
i = rate of interest in decimal form (i.e 8% = 0.08)
n = number of years
a = number of payments per year

Therefore,

Therefore, the correct answer is d.$21,036.13

jeff jeffy answered 2 years ago

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