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Tipson Corporation will invest $25,000 every January 1st for the next six years (2020 – 2025)....

Tipson Corporation will invest $25,000 every January 1st for the next six years (2020 – 2025). If Tipson will earn 12% on the investment, what amount will be in the investment fund on December 31, 2025 $?

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Expert Solution

FV of annuity = P * [ (1+r)^n -1 ]/ r
Periodic payment P= $              25,000.00
rate of interest per period r=
Rate of interest per year 12.0000%
Payment frequency Once in 12 months
Number of payments in a year                            1.00
rate of interest per period 0.12*12/12 12.0000%
Number of periods
Number of years                                  6
Number of payments in a year                                  1
Total number of periods n=                                  6
FV of annuity = 25000* [ (1+0.12)^6 -1]/0.12
FV of annuity =                202,879.73

Answer is:

202,879.73

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ekkarill92 answered 1 year ago
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