Answer: the value of the annuity when you retire is $130919
Step-by-step explanation:
We would apply the future value which is expressed as
FV = C × [{(1 + r)^n - 1}/r]
Where
C represents the yearly payments.
FV represents the amount of money
in your account at the end of 10 years.
r represents the annual rate.
n represents number of years or period.
From the information given,
r = 7% = 7/100 = 0.07
C = 20/100 × 47400 = $9480
n = 10 years
Therefore,
FV = 9480 × [{(1 + 0.07)^10 - 1}/0.07]
FV = 9480 × [{1.967 - 1}/0.07]
FV = 9480 × 13.81
FV = $130919
