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Assume you are planning to invest $8,475 each year for six years and will earn 9...

Assume you are planning to invest $8,475 each year for six years and will earn 9 percent per year. Determine the future value of this annuity due problem if your first $8,475 is invested now. (Round answer to 2 decimal places, e.g., 1,220.25.)

Future value $
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Answer #1

Payment = $8,475 | Rate of interest - 9% | Time = 6 years

We need to find the Future value of Annuity due as first payment is invested now.

Future Value of Annuity-due formula = (Payment / Rate)*((1+Rate)T - 1)*(1+Rate)

Putting Value of payment, rate and time

Future Value of Annuity-due = (8,475 / 9%) * ((1+9%)6 - 1) * (1+9%)

Future Value of Annuity-due = 94166.67 * 0.73804

Future Value of Annuity-due = $69,498.68

Hence, Future Value of Annuity Due is $69,498.68.

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