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iogann1982 [59]
2 years ago
9

Assume you are to receive a 30-year annuity with annual payments of $2,000. The first payment will be received at the end of Yea

r 1, and the last payment will be received at the end of Year 30. You will invest each payment in an account that pays 6 percent annually compounded interest. What will be the value in your account at 55 years from today?​
Business
1 answer:
max2010maxim [7]2 years ago
6 0

Answer:

Total FV= $678.615.02

Explanation:

<u>First, we need to calculate the value of the annuity at the end of the last payment:</u>

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {2,000*[(1.06^30) - 1]} / 0.06

FV= $158,116.37

<u>Now, the total future value after 25 years:</u>

FV= PV*(1 + i)^n

FV= 158,116.37*(1.06^25)

FV= $678.615.02

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