In: Finance
1) Ordinary Annuity
Future Value of annuity = 500 [ { ( 1 + 0.09 )10 - 1 } / 0.09 ]
= 500 * [ 1.3674 / 0.09 ]
= 500 * 15.19293
= $ 7,596.47 Answer
2) Future value of annuity due =
2) Future value of annuity due = ( 1 + 0.09 ) * 500 [ { ( 1 + 0.09 )10 - 1 } / 0.09 ]
= 1.09 * 500 * [ 1.3674 / 0.09 ]
= 1.09 * 500 * 15.19293
= $ 8,280.15 Answer