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

Algebra ->  Sequences-and-series -> 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       Log On


   

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) About Me  (Show Source):
You can put this solution on YOUR website!
For annuity due, the formula is
A+=+R%2A%28%28%281%2Br%2Fn%29%5E%28nt%29+-+1%29%2F%28r%2Fn%29%29%2A%281%2Br%2Fn%29,
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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