Question

5. a = 100 n = 10, i = 5% find the FV of annuity
Using the formula FV = a / (1 + i) n - 1}, FV is equal to​

Answer 1

Answer:

The FV of annuity is equal to 1257.6.

Step-by-step explanation:

Considering the correct formula for calculating FV = a[(1+i)ⁿ - 1] / i

Given data:

Annuity Payment, a = 100

Interest rate per time period, i = 5% = 0.05

No. of time periods, n = 10 years

FV is the future value of annuity

To find: the value of FV

Now,

Using the given formula of FV, we get

FV = a[(1+i)ⁿ - 1] / i

Or, FV = [100{(1 + 0.05)¹⁰ - 1}] / [0.05]

Or, FV = [100{(1.05)¹⁰ - 1}] / [0.05]

Or, FV = [100 * (1.6288 - 1)] / [0.05]

Or, FV = [100 * 0.6288] / 0.05

Or, FV = 62.88 / 0.05  

Or, FV = 1257.6

Hope this is helpful!!!