Find the present value of the annuity. Round to the nearest cent.
-Payments of $3,300 made annually for 25 years at 8% compounded annually

Question

Find the present value of the annuity. Round to the nearest cent. 
-Payments of $3,300 made annually for 25 years at 8% compounded annually

Quizplus · Accepted Answer

The correct answer is found by calculating the future value of an annuity. The formula for the future value of an annuity is FV = P * [((1 + r)^n - 1) / r], where P is the payment amount, r is the annual interest rate (as a decimal), and n is the number of payments. Plugging in the given values: P = $3,300, r = 0.08, and n = 25, we get FV = $3,300 * [((1 + 0.08)^25 - 1) / 0.08] = $3,300 * [4.2923] = $35,226.77.

Find the Present Value of the Annuity