Question

Find the future value of an annuity of $ 1300 paid at the end of each year for 10 years, if interest is earned at a rate of 7%, compounded annually. (Round your answer to the nearest cent.)

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ANSWERED
asked 2020-11-08
Find the future value of an annuity of $ 1300 paid at the end of each year for 10 years, if interest is earned at a rate of \(7\%,\) compounded annually. (Round your answer to the nearest cent.)

Expert Answers (1)

2020-11-09
Step 1
Use the formula:
\(F=P\frac{((l\ +\ i)^{n}\ -\ 1)}{i}\)
Where P id the regular payment amount i is the annual interest rate n is the time-intervals of repayment.
Step 2
Apply the formula:
\(F=1300\frac{((1\ +\ 0.07)^{10}\ -\ 1)}{0.07}\)
\(= 1761.3823\)
The future value of annuity, rounded to the nearest cent, is $ 17961.38.
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