Question

Find the amount of annuity.

Answer 1

295×((((1+0.1÷4)^(4×6)−1)
÷(0.1÷4))×(1+0.1÷4))
=9,781.54

Answer 2

We need to find the future value of annuity due with the following given values :-

Payment, Pm = 295 dollars.

N=4 (for quarterly)

Rate at 10%, r = 0.10/4 = .025

Time for 6 years, T = 6x4 = 24.

Future Value formula is :-

$FV_{ad}=P_m*(1+r)*[\frac{(1+r)^T-1}{r} ] \\\\ FV_{ad}=295*(1+0.025)*[\frac{(1+0.025)^{24}-1}{0.025} ] \\\\ FV_{ad}=295*(1.025)*[\frac{(1.025)^{24}-1}{0.025} ] \\\\ FV_{ad}=295*(1.025)*[\frac{(1.80872595)-1}{0.025} ] \\\\ FV_{ad}=295*(1.025)*[\frac{0.80872595}{0.025} ] \\\\ FV_{ad}=295*(1.025)*(32.34903798) \\\\ FV_{ad}=9,781.54 \;dollars$

Hence, the final answer is 9,781.54 dollars.