Question

What is the accumulated sum of each of the following streams of​ payments?

a.

​$480 a year for 10 years compounded annually at 11 percent.

b.

​$108 a year for 7 years compounded annually at 9 percent.

c.

​$37 a year for 12 years compounded annually at 11 percent.

d.

​$26 a year for 5 years compounded annually at 6 percent.

Answer 1

	P =	Periodic payments
	r =	rate of interest
	n =	no of years
a)	Future Value of Annuity =	P ( (1 + r)n - 1 ) / r
		480* ((1 + 11%)^10 - 1) / (11%)
		8026.56
b)	Future Value of Annuity =	P ( (1 + r)n - 1 ) / r
		108* ((1 + 9%)^7 - 1) / (9%)
		993.65
c)	Future Value of Annuity =	P ( (1 + r)n - 1 ) / r
		37* ((1 + 11%)^12 - 1) / (11%)
		840.39
d)	Future Value of Annuity =	P ( (1 + r)n - 1 ) / r
		26* ((1 + 6%)^5 - 1) / (6%)
		146.56