Question

Determine the amount of the ordinary annuity at the end of the given period. (Round your final answer to two decimal places.)$200 deposited quarterly at 6.9 for 6 years

Answer 1

For solving this question it is necessary to apply the formula

`FV=P\cdot(((1+r)^n-1)/(r))`

Where:

FV = future value of the account;

P= deposit = $200

r = quarterly percentage - use decimal=0.069

n = number of deposits = 4* 6=24

`\begin{gathered} FV=P\cdot(((1+r)^n-1)/(r)) \\ FV=200\cdot(((1+(0.069)/(4))^(24)-1)/((0.069)/(4))) \\ FV=200\cdot(((1+0.01725)^(24)-1)/(0.01725)) \\ FV=200\cdot(((1.01725)^(24)-1)/(0.01725)) \\ FV=200\cdot(0.5075)/(0.01725)=5884.38 \\ FV=5884.38 \end{gathered}`

FV=$5884.38