An investment program was set up using an annuity due with payments of $1,200 at the beginning of each quarter. Consider payments for 5 years are made into an account expected to pay 8% compounded quarterly. What is the amount of annuity?

An investment program was set up using an annuity due with payments of $1,200 at the beginning of each quarter. Consider payments for 5 years are made into an account expected to pay 8% compounded quarterly. What is the amount of annuity?

Question
Analysis
asked 2021-03-09
An investment program was set up using an annuity due with payments of $1,200 at the beginning of each quarter. Consider payments for 5 years are made into an account expected to pay 8% compounded quarterly. What is the amount of annuity?

Answers (1)

2021-03-10
Use the formula:
\(\displaystyle{A}={C}\frac{{{\left({1}+{i}\right)}^{{n}}-{1}}}{{i}}\)
Substitute from the given
\(\displaystyle{A}=\${1200}\frac{{{\left({1}+{0.08}\right)}^{{20}}-{1}}}{{0.08}}\)
=$54,914.35
0

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