SOLUTION: Please help me with this problem: Find the future value of the ordinary annuity. Interest is compounded annually, unless otherwise indicated. R = $2500, i = 7%; interest comp

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Question 204084: Please help me with this problem:
Find the future value of the ordinary annuity. Interest is compounded annually, unless otherwise indicated.
R = $2500, i = 7%; interest compounded quarterly for 16 years
Answer by feliz1965(151) (Show Source):
You can put this solution on YOUR website!
We need the formula:
A = P(1 + r/n)^(nt)
P = principal amount (initial investment)
r = annual nominal interest rate (as a decimal)
n = number of times the interest is compounded per year
t = number of years
A = amount after time t in years
Let R = P
Let i = r
Let n = 4 for quarterly
Let t = 16 years
We are looking for A.
A = 2500(1 + 0.07/4)^(4)(16 years)
A = $7588.27