Question

Find the amount of annuity.

Amount of each deposit: $295
deposited: quarterly
Rate per year: 10%
Number of years: 6
Type of annuity: due

Answer 1

295×((((1+0.1÷4)^(4×6)−1)
÷(0.1÷4))×(1+0.1÷4))
=9,781.54

Answer 2

We need to find the future value of annuity due with the following given values :-

Payment, Pm = 295 dollars.

N=4 (for quarterly)

Rate at 10%, r = 0.10/4 = .025

Time for 6 years, T = 6x4 = 24.

Future Value formula is :-

`FV_(ad)=P_m*(1+r)*[((1+r)^T-1)/(r) ] \\\\ FV_(ad)=295*(1+0.025)*[((1+0.025)^(24)-1)/(0.025) ] \\\\ FV_(ad)=295*(1.025)*[((1.025)^(24)-1)/(0.025) ] \\\\ FV_(ad)=295*(1.025)*[((1.80872595)-1)/(0.025) ] \\\\ FV_(ad)=295*(1.025)*[(0.80872595)/(0.025) ] \\\\ FV_(ad)=295*(1.025)*(32.34903798) \\\\ FV_(ad)=9,781.54 \;dollars`

Hence, the final answer is 9,781.54 dollars.