Question

What is the future value of a 5-year annuity due with annual payments of $ 2,535 , evaluated at a 14.18 percent interest rate? Enter your answer to the nearest $.01. Do not use $ or , signs in your answer. Enter your answer as a positive number.

Answer 1

$19,201.09

Explanation:

The future value of the annuity due can be found using any of a number of apps, calculators, or spreadsheets. It can also be found using the formula ...

A = P(1 +r)((1 +r)^n -1)/r

where P is the annual payment, r is the annual interest rate, and compounding is yearly for n years.

A = 2535(1.1418)(1.1418^5 -1)/0.1418 ≈ 19,201.09

The value will be $19,201.09.