Question

Find the interest earned and the future value of an annuity with weekly payments of $400 for three years into an account that pays 7% interest per year compounded semiannually.

Answer 1

Answer:

the interest earned= 93.401

and the future value of an annuity= 493.401

Step-by-step explanation:

Given Data:

Interest rate= 7%

time,t = 3 years

weekly payment, P= 400

At the end of 3 years, final investment A= ?

n= 52 as it is weekly

As per the interest formula

A= P(1+r/n)^nt

Putting value in above equation

= $400\left(1+\frac{0.07}{52}\right)^{156}$

= 493.401

Interest earned = A-P

                           = 493.401-400

                          = 93.401 !