Question

Find the amount (future value) of each ordinary annuity. $1000/year for 10 years at a 5% compounded annually.

Answer 1

The future value is calculated as,

`FV=P(1+(r)/(n))^(Yn)`

Here, P= $1000

Y= 10

r=5%=5/100

n=1 (since compounded annually)

So,

`FV=1000(1+(5)/(100))^(10)=1628.89`