Question

Find the future value of an ordinary annuity of sh.25,000 at a compunding rate of 7% p.a. after 9 years?​

Answer 1

sh.299,449.72

Explanation:

The future value of an ordinary annuity with annual payments P earning interest rate r compounded annually for t years is ...

FV = P((1+r)^t -1)/r

For the given numbers, the future value is ...

FV = sh.25000(1.07^9 -1)/0.07 ≈ sh.299,449.72