Find the future value of an annuity if you invest $800 semiannually for 2.5 years at 5.5% compounded semiannually.
A) $4226.13
B) $4326.25
C) $4205.88
D) $4276.63

Question

Quizplus · Accepted Answer

The future value of an annuity can be calculated using the formula FV = P * [(1 + r)^nt - 1] / r, where P is the payment amount, r is the interest rate per period, n is the number of periods per year, and t is the number of years. Here, P = $800, r = 0.055/2, n = 2, and t = 2.5. Plugging in these values gives the future value as approximately $4226.13.

Find the Future Value of an Annuity If You Invest