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Find the future value of an ordinary annuity of $1,000 paid quarterly for 9 years, if...

Find the future value of an ordinary annuity of $1,000 paid quarterly for 9 years, if the interest rate is 9%, compounded quarterly. (Round your answer to the nearest cent.)

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Answer #1

Future value is present value of cash flow+ interest earned.

When there is uniform series of cash flow occuring at the end of each period , we shall use ordinary annuity.

Here $1,000 is paid at the end of each quarter for 9 years.

We will use the following formula:

Where,

FV = ?

A =$1,000

m=number of period (compounded per year) 4 [quarterly]

t= number of years = 9

r=0.09 (9%)

=$54,569.6

Thus, the future value would be $54,569.6

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