Question

Determine the amount of the ordinary annuity at the end of the given period. (Round your final answer to two decimal places.)$200 deposited quarterly at 6.9 for 6 years

Answer 1

For solving this question it is necessary to apply the formula

$FV=P\cdot(\frac{(1+r)^n-1}{r})$

Where:

FV = future value of the account;

P= deposit = $200

r = quarterly percentage - use decimal=0.069

n = number of deposits = 4* 6=24

$\begin{gathered} FV=P\cdot(\frac{(1+r)^n-1}{r}) \\ FV=200\cdot(\frac{(1+\frac{0.069}{4})^{24}-1}{\frac{0.069}{4}}) \\ FV=200\cdot(\frac{(1+0.01725)^{24}-1}{0.01725}) \\ FV=200\cdot(\frac{(1.01725)^{24}-1}{0.01725}) \\ FV=200\cdot\frac{0.5075}{0.01725}=5884.38 \\ FV=5884.38 \end{gathered}$

FV=$5884.38