Question

find the future value of an ordinary annuity of $110 paid at the end of each quarter for five years if interest is earned at a rate of 6% compounded quarterly ....round to 2 decimal places

Answer 1

Given:

Amount paid is, p = $110.

Interest rate is, r = 6%=0.06.

Nmber of years, t = 5 years.

Number of times per year is, n = 3 (each quarter).

The objective is to find the future values compounded quarterly.

The general formula to find the compound interest is,

`A=P(1+(r)/(n))^(n(t))`

Substitute the given values in the above equation.

`\begin{gathered} A=110(1+(0.06)/(3))^(3(5)) \\ A=110(1+0.02)^(15) \\ A=148.05 \end{gathered}`

Hence, the future value is .