Final answer:
The future value of an annuity with annual deposits of RM5,000 for 3 years at an interest rate of 10% is RM16,550.
Step-by-step explanation:
To calculate the future value of an annuity where you deposit RM5,000 at the end of each year for 3 consecutive years into an account that pays 10 percent interest annually, you will use the future value of an annuity formula:
FV = P × {[(1 + r)^n - 1] / r}
Where:
FV = future value of the annuity
P = periodic payment amount
r = annual interest rate (as a decimal)
n = number of periods
In this case:
P = RM5,000
r = 10% or 0.10 annually
n = 3 years
So, the future value (FV) is calculated as follows:
FV = RM5,000 × {[(1 + 0.10)^3 - 1] / 0.10}
FV = RM5,000 × {[(1.1)^3 - 1] / 0.10}
FV = RM5,000 × {[1.331 - 1] / 0.10}
FV = RM5,000 × [0.331 / 0.10]
FV = RM5,000 × 3.31
FV = RM16,550
The future value of the annuity after 3 years will thus be RM16,550.