Question

You have $54,773.07 in a brokerage account, and you plan to deposit an additional $6,000 at the end of every future year until your account totals $290,000. You expect to earn 11% annually on the account. How many years will it take to reach your goal? Round your answer to two decimal places at the end of the calculations.

A. What's the future value of a 3%, 5-year ordinary annuity that pays $700 each year? Round your answer to the nearest cent.

B. If this was an annuity due, what would its future value be? Round your answer to the nearest cent.

Answer 1

1.

Number of year it take is calculated in excel and screen shot provided below:

it will take 11 year.

A.

In the ordinary annuity payment is made at the end of the period and in the annuity due payment is made at the beginning of the year.

Future value of Ordinary annuity is calculate in excel and screen shot provided below:

Future value of ordinary annuity is $3,716.40.

B.

Future value of annuity due is calculate in excel and screen shot provided below:

future value of annuity due is $3,827.89.