Question

Ali will recieve $1500 at the end of each year for the next

three years from his real estate property. The market intrest rate
is currently 6.25%. What will the value of this income be in three
years.

Answer 1

The value of Ali's income in three years will be approximately $4,778.35.

Step-by-step explanation:

To calculate the value of Ali's income in three years, we need to use the formula for calculating the future value of an ordinary annuity:

Future Value = P * ((1 + r)^n - 1) / r

Where P is the annual payment, r is the interest rate, and n is the number of years.

Plugging in the values, we get: Future Value = $1500 * ((1 + 0.0625)^3 - 1) / 0.0625 = $4,778.35

Therefore, the value of Ali's income in three years will be approximately $4,778.35.