Question

What is the future value of a $500 annuity payment over eight years if interest rates are 14 per 14 percent

Answer 1

FV= $6,616.38

Step-by-step explanation:

Giving the following information:

Annual cash flow= $500

Number of periods (n)= 8

Interest rate= 14%

To calculate the future value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual cash flow

FV= {500*[(1.14^8) - 1]} / 0.14

FV= $6,616.38