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What is the future value of an ordinary annuity that pays $1,400 per year fod 10 years if the appropriate discount rate is 4% ?

a-$14,000.00
b-$14,560.00
c-$16,808.55
d-$17,480.89
e-$24.672.53

1 Answer

2 votes

Final answer:

The future value of the ordinary annuity is $16,808.55.

Step-by-step explanation:

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

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

Where FV is the future value, PMT is the annual payment, r is the discount rate, and n is the number of years.

In this case, the annual payment is $1,400, the discount rate is 4%, and the number of years is 10. Substituting these values into the formula, we get:

FV = 1400 * [(1 + 0.04)^10 - 1] / 0.04

Calculating this expression gives us an answer of $16,808.55.

User Adam Kewley
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