The value of Warren Ford annuity due is $80,878.21
Define Future Value of an Annuity.
The future value of an annuity is the value of a group of recurring payments at a certain date in the future, assuming a particular rate of return, or discount rate. The higher the discount rate, the greater the annuity's future value.
Given,
Payment fund semiannually is = $1,700
Rate = 6% or 0.06
Time = 15 years
The future value is,
FVₙ =PMT( (1+i/m)ⁿ - 1 ) / (i/m) )
Where,
PMT = $1,700
i = 0.06
m = 2
n = 15 * 2 = 30 periods
Now, plug in the values
FV₃₀ = PMT ( (1 + 0.06/2)³⁰ - 1 ) / (0.06/2) )
= $1,700( (1.03)³⁰ - 1 ) / (0.03) )
≈ $80,878.2067 or $80,878.21
Hence, the value of Warren Ford annuity due is $80,878.21
To read more about Future Value
brainly.com/question/27011316
#SPJ1
