Claire Fitch is planning to begin an individual retirement program in which she will invest $3,900...
Claire Fitch is planning to begin an individual retirement
program in which she will invest $3,900 at the end of each year.
Fitch plans to retire after making 30 annual investments in the
program earning a return of 12%. What is the value of the program
on the date of the last payment (30 years from the present)? (PV of
$1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate
factor(s) from the tables provided. Round FVA factor to 4
decimals.)
|
Homework Answers
Future value of annuity=Annuity[(1+rate)^time period-1]/rate
=$3900[(1.12)^30-1]/0.12
=$3900*241.3327(Approx)
| Periodic Cash flow | *f(FV of an Ordinary Annuity) | =Future Value |
| 3900 | 241.3327 | =$941197.53(Approx). |
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