Question

Find the interest earned and the future value of an annuity with annual payments of $1,400 for 18 years into an account that pays 4% interest per year.

Answer 1

interest earned= 1436.143

the future value of an annuity= 2836.143

Step-by-step explanation:

Given Data:

Interest rate= 4%

time,t = 18 years

Annual payment, P= 1400

At the end of 18 years, final investment A= ?

As per the interest formula for interest

A= P(1+r)t

Putting the values in above equation

= 1400(1+0.04)^18

= 2836.143

Interest earned = A-P

= 2836.143-1400

= 1436.143 !