Question

8. Don made deposits of $500 at the end of each year for eight years. The rate is 8% compounded annually. Using the tables found in the textbook, calculate the value of Don's annuity at the end of eight years.

Answer 1

Explanation:

P = $ 500 ;r =8% ; n= 8

A = P* (1+r/100)^n

A= 500 * ( 1 + 8/100)⁸

= 500 * ( 1 + 0.08)⁸ = 500 * 1.08⁸

=500*1.85

= $ 925.45