Question

miss m. Fuentes is planning to contribute $3,700 per year for the next 18 years to retirement plan. she has 2 choices: certificate of the deposit that pays 17 % per year versus a stock found that will yield 19% per year. find the future value of certificate of deposit

Answer 1

Annuity is series of cash flows that are deposited at regular intervals for specific period of time.  
  
FV of Annuity = CF [ (1+r)^n - 1 ] / r  
r - Int rate per period  
n - No. of periods  

particulars	Amount
Cash Flow	$            3,700.00
Int Rate	17.000%
Periods	18

FV of Annuity = Cash Flow * [ [ ( 1 + r ) ^ n ] - 1 ] /r
= $ 3700 * [ [ ( 1 + 0.17 ) ^ 18 ] - 1 ] / 0.17
= $ 3700 * [ [ ( 1.17 ) ^ 18 ] - 1 ] / 0.17
= $ 3700 * [ [16.879] - 1 ] / 0.17
= $ 3700 * [15.879] /0.17
= $ 345600.75

Please comment if futher assistance is required