Crystal Nelson is 30 years old and she invests $3,300 in an annuity, earning a 8%...
Crystal Nelson is 30 years old and she invests $3,300 in an annuity, earning a 8% compound annual return at the beginning of each period, for 21 years. What is the cash value of this annuity due at the end of 21 years?
(Please explain it in as much as you are able to and illustrate it as much as possible please.)
Homework Answers
Future value of annuity due=(1+rate)*Annuity[(1+rate)^time period-1]/rate
=1.08*$3300[(1.08)^21-1]/0.08
=1.08*3300*[5.033833715-1]/0.08
=1.08*3300*50.42292144
=$179707.29(Approx).
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