Round your answer to the nearest cent.
-Find the 7-year future value of an ordinary annuity with a contribution of $100 per year into an account that pays 6% per year, compounded annually.
A) $839.38
B) $236.42
C) $697.53
D) $2506.05

Question

Quizplus · Accepted Answer

The future value of an ordinary annuity can be calculated using the formula $FV = P \times \frac{(1 + r)^n - 1}{r}$, where $P$ is the annual payment, $r$ is the annual interest rate, and $n$ is the number of periods. Plugging in the given values ($P = 100$, $r = 0.06$, $n = 7$), we get $FV = 100 \times \frac{(1 + 0.06)^7 - 1}{0.06}$, which calculates to approximately $839.38.

Round Your Answer to the Nearest Cent