Question

Find the future value of the annuity. Round your answer to the

nearest cent. Payment $3900 Rate 1.74% Compounded Quarterly Time
5.5 years

Answer 1

To find the future value of the annuity, use the formula: Future Value = Payment × [(1 + interest rate/n)^(n × time) - 1] / (interest rate/n). Substitute the given values into the formula and calculate the expression.

Step-by-step explanation:

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

Future Value = Payment × [(1 + interest rate/n)^(n × time) - 1] / (interest rate/n)

Plugging in the given values:

Payment = $3900

Interest rate = 1.74%

Compounding periods per year = 4 (quarterly)

Time = 5.5 years

Substituting these values into the formula:

Future Value = $3900 × [(1 + 0.0174/4)^(4 × 5.5) - 1] / (0.0174/4)

Calculating this expression will give us the future value of the annuity.