What is the future value of an annuity due that pays $500 per year for each of the next three years if the interest rate is 6%?
A) $1,591.80
B) $1,687.31
C) $546.35
D) $2,123.25
E) $2,250.65

Question

Quizplus · Accepted Answer

FV = PMT × 11ea7fdb_fc17_1ddb_a768_095a94ea69cc_TB2902_11 × 11ea7fdb_fc17_1ddc_a768_7521e59d91ad_TB2902_11 FV = 500 × 11ea7fdb_fc17_1ddd_a768_11e2a62fa5ee_TB2902_11 × 11ea7fdb_fc17_1dde_a768_09998bd55788_TB2902_11 = $1,687.31
Using a financial calculator:
N = 3, I/Y = 6, PV = 0, PMT = -500, cpt FV = 1,591.8
1,591.8 × 1.06 = $1,687.31

What Is the Future Value of an Annuity Due That