Question

Assuming a discount rate of 14%, what is the future value of

50,000 per year for 20 years if the payments occur at the beginning
of each period?

Answer 1

To calculate the future value of $50,000 per year for 20 years, assuming a discount rate of 14%, you can use the future value formula for an annuity.

Step-by-step explanation:

To calculate the future value of $50,000 per year for 20 years, assuming a discount rate of 14%, we can use the future value formula for an annuity.

The formula for the future value of an annuity is:

FV = P * [((1 + r)^n) - 1] / r

Where:

• FV is the future value
• P is the payment each period
• r is the discount rate
• n is the number of periods

Using this formula, we can plug in the values from the question:

FV = $50,000 * [((1 + 0.14)^20) - 1] / 0.14

Calculating this equation will give you the future value of the annuity.