SOLUTION: Suppose you start an annuity where you invest $2,000 at the beginning of each year and 4% interest is paid at the end of the year. What is the value of the annuity at the end of 5
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Question 1042360: Suppose you start an annuity where you invest $2,000 at the beginning of each year and 4% interest is paid at the end of the year. What is the value of the annuity at the end of 5 years, rounded to the nearest dollar? It is $
Answer by robertb(5830) (Show Source): You can put this solution on YOUR website!
For annuity due, the formula is
,
where A is the future value, R is the periodic (in this case, annual) payment, r is th annual interest rate, n is the annual compounding frequency, and t is the number of years.
Here,
R = $2,000
r = 0.04
n = 1
t = 5
===>
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