Question

Find the future value of an annuity of $1800 paid at the end of each year for 10 years, if interest is earned at a rate of 4%, compounded annually. (Round your answer to the nearest cent.)

Answer 1

The future value of the annuity would be approximately $21,698.93.

Step-by-step explanation:

The future value of an annuity can be calculated using the formula:

FV = P imes ((1+r)^n - 1) / r

Where:

• FV is the future value of the annuity
• P is the payment amount (annual deposit)
• r is the interest rate
• n is the number of periods (in this case, the number of years)

Plugging in the given values, we get:

FV = 1800 imes ((1+0.04)^10 - 1) / 0.04

= $21,698.93

The future value of the annuity would be approximately $21,698.93.