Question

What is the future value of a 5-year annuity due with annual payments of $1,855, evaluated at a 5.69 percent interest rate?

Please include excel formulas.

Answer 1

Ans:- In this question, we need to find the FV of an annuity due. we will use the FV function of excel to find the answer.

Rate = 5.69%, Nper = 5, Pmt = -$1855, PV = 0, TYPE = 1

Therefore FV of the annuity due in 5 years will be $10,983.60.

Note:- If we need to find the FV of ordinary annuity we put (TYPE = 0) and (TYPE = 1) in case of an annuity due.

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