Question

What is the future value of a $1,000 annuity payment over five years if interest rates are 9%?

Answer 1

$5984.71

Explanation:

The future value of an annuity can be calculated using the future value of an annuity formula:

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

Where:

FV is the future value of the annuity,

P is the annuity payment (in this case, $1,000),

r is the interest rate per period (in decimal form),

n is the number of periods.

Let's substitute:

FV = 1000 (
`((1+0.09)^(5)-1 )/(0.09)`)

FV ≈ $5984.71

So, the answer is $5984.71.