Answer:
The value of Ted's annuity at the end of eight years is $5318.3138.
Step-by-step explanation:
Given : Ted Williams made deposits of $500 at the end of each year for eight years. The rate is 8% compounded annually.
To find : The value of Ted's annuity at the end of eight years ?
Solution :
The future value of an ordinary annuity is given by,
Where,
C is deposit amount C=$500
n is the number of payments n=8
i is the interest rate i=8%=0.08
Substitute the value in the formula,
Therefore, the value of Ted's annuity at the end of eight years is $5318.3138.