Question

What is the future value of a $900 annuity payment over five years if interest rates are 8 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

Answer 1

Future Value of Annuity = $5279.94

Step-by-step explanation:

An annuity is a series of cash flows that are constant, occur after equal intervals of time and are for a definite and limited time period. The future value of an annuity is calculated using the attached formula,

Future Value of annuity = 900 * [((1+0.08)^5 - 1) / 0.08]

Future Value of Annuity = $5279.94