Final answer:
The future value of a series of 6 annual payments of $400, earning 4.5% compounded annually, is $2,742.86.
Step-by-step explanation:
To find the total future value of a series of annual payments, we can use the formula:
Future Value = Payment Amount x [(1 + Interest Rate) ^ Number of Payments - 1] / Interest Rate
Plugging in the given values:
Payment Amount = $400
Interest Rate = 4.5% = 0.045
Number of Payments = 6
Using this formula, we can calculate the future value:
Future Value = $400 x [(1 + 0.045) ^ 6 - 1] / 0.045
Future Value = $400 x [1.308717 - 1] / 0.045
Future Value = $400 x 0.308717 / 0.045
Future Value = $2,742.86