Question

What is the accumulated sum of the following stream of payments? $19,042 every year at the beginning of the year for 15 years, at 6.72 percent, compounded annually. Round the answer to two decimal places.

Answer 1

Annual Payment = $19,042
Number of Payments = 15 years
Annual Interest Rate = 6.72%

Payments are made at the beginning of the year

Accumulated Sum = $19,042*1.0672^15 + $19,042*1.0672^14 + … + $19,042*1.0672^2 + $19,042*1.0672
Accumulated Sum = $19,042 * 1.0672 * (1.0672^15 - 1) / 0.0672
Accumulated Sum = $19,042 * 26.246364
Accumulated Sum = $499,783.26