Homework Answers
The Future Value is $31,874.85 at the end of 10 years .
Future Value Formula =
FV = Pmt x ((1 + i)^ (n - 1) / i
Pmt is the Amount of payment ($2000)
i is the rate of interest (10%) and
n is the number of periods (10 years)
We may also use the below formula for the problem since the Pmt amount is same ($2000) for all the periods (10 years)
FV = Pmt x Future value annuity factor
Future value annuity factor for 10% 10 years is 15.9374.
FV = $2000 x 15.9374 = $31,875
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