Question

For each of the following annuities, calculate the future value. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Future Value	Annual Payment	Years	Interest Rate
	$1,520	10	9	%
	$6,540	34	10
	$3,640	9	7
	$8,330	36	11

Answer 1

1)

Future value = Annuity * [(1 + r)^n - 1] / r

Future value = 1520 * [(1 + 0.09)^10 - 1] / 0.09

Future value = 1520 * [2.367364 - 1] / 0.09

Future value = 1520 * 15.19293

Future value = $23,093.25

2)

Future value = Annuity * [(1 + r)^n - 1] / r

Future value = 6,540 * [(1 + 0.1)^34 - 1] / 0.1

Future value = 6,540 * [25.54767 - 1] / 0.1

Future value = 6,540 * 245.476699

Future value = $1,605,417.61

3)

Future value = Annuity * [(1 + r)^n - 1] / r

Future value = 3,640 * [(1 + 0.07)^9 - 1] / 0.07

Future value = 3,640 * [1.838459 - 1] / 0.07

Future value = 3,640 * 11.977989

Future value = $43,599.88

4)

Future value = Annuity * [(1 + r)^n - 1] / r

Future value = 8,330 * [(1 + 0.11)^36 - 1] / 0.11

Future value = 8,330 * [42.818085 - 1] / 0.11

Future value = 8,330 * 380.164406

Future value = $3,166,769.50