Question

Determine the amount of the ordinary annuity at the end of the given period. (Round your final answer to two decimal places.)

$700 deposited semiannually at 6.2% for 8 years

Answer 1

Calculating the Future Value of Ordinary annuity at the end of period:-

$Future Value= C*\frac{[(1+r)^{n}-1]}{r}$

Where, C= Periodic Payments = $700

r = Periodic Interest rate = 6.2%/2 = 3.1%

n= no of periods = 8years*2 =16

$Future Value= 700*\frac{[(1+0.031)^{16}-1]}{0.031}$

$Future Value= 700*\frac{[1.62981625351-1]}{0.031}$

Future Value = $14,221.66

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