Question
Asked Dec 11, 2019
124 views

Find the future value of the ordinary annuity. Interest is compounded annually unless otherwise indicated.

PMT=$900, 8% interest compounded semiannually for 13 years.

check_circle

Expert Answer

Step 1

Given: -

help_outline

Image Transcriptionclose

It is given that PMT = $900, Rate of interest = 8%, compounded semi-annually.

fullscreen
Step 2

To find: -

help_outline

Image Transcriptionclose

The future value of the ordinary annuity.

fullscreen
Step 3

Calculation...

help_outline

Image Transcriptionclose

To find the future value of the ordinary annuity, the formula used will be, Time Future value = PMT ×(1+Rate of interest)* Now, putting the values in the given formula, Time -1 (1+Rate of interest) Future value = PMT × Rate of interest 26 (1+4%)" – 1 = $900 x 4% 26 = $900x (1+4%)ª 26 104 -1 100 = $900× %3D 4 100

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in