The calculated future value of the given annuity is $3762.05
How to determine the future value of an ordinary annuity
To calculate the future value of an ordinary annuity, we use:
FV = R * ((1 + r/m)^(mt) - 1) / (r/m)
Where:
- FV is the future value
- R is the payment amount
- m is the frequency of deposits (monthly in this case)
- r is the annual interest rate (3% in decimal form)
- t is the time in years (3 years)
Substitute the known values into the equation
FV = 100 * ((1 + 0.03/12)^(12*3) - 1) / (0.03/12)
Evaluate
FV = 3762.05
Hence, the future value of the given annuity is $3762.05