Question

Find the future value for the ordinary annuity with the given payment and interest rate. PMT=$2,250;1,30% compounded quarterly for 11 years. The future value of the ordinary annuity is $ ___. (Do not round until the final answer. Then round to the nearest cent as needed.)

Answer 1

To find the future value of an ordinary annuity, use the formula FV = PMT * [(1 + r/n)^nt - 1] / (r/n). Plug in the given values to calculate the future value.

Step-by-step explanation:

To find the future value of an ordinary annuity, we can use the formula:

FV = PMT × [(1 + r/n)nt - 1] / (r/n)

Where:

• FV is the future value of the annuity
• PMT is the payment made to the annuity
• r is the interest rate
• n is the number of compounding periods per year
• t is the number of years

For this problem, PMT = $2,250, r = 1.30% = 0.013, n = 4 (compounded quarterly), and t = 11. Plug in these values into the formula to calculate the future value of the annuity.

Using the formula, we find that the future value of the ordinary annuity is $____.