In: Finance
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
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