Question

Calculate the final amount of a 20-year, long term savings plan if a payment of $2000 is made at the end of every year. Interest is 8.5% compounded annually.

Answer 1

Hi there
The formula of the future value of annuity ordinary is
Fv=pmt [(1+r)^(n)-1)÷r]
Fv future value?
PMT payment per year 2000
R interest rate 0.085
N time 20 years

Fv=2,000×(((1+0.085)^(20)−1)
÷(0.085))=96,754.03

Hope it helps