Asked Dec 10, 2019

The future value of $500 to be received at the beginning of each year for seven years at
a discount rate of 8 percent is ? .


Expert Answer

Step 1

Annuity = $500

Time Period (t) = 7 Years

Discount Rate (r) = 8%



Image Transcriptionclose

(1+r)' –1 × (1+r) Future Value =| Annuity × (1+0.08)' – 1 $500 x| ×(1+0.08) %3D 0.08 (1.08)' –1 = $500 x x1.08 0.08 1.71382427–1 =| $500 x x1.08 0.08 0.71382427 $500 x- ×1.08 0.08 =[s500 x 8.92280338]×1.08 = $4, 461.40169×1.08 = $4,818.3138252


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