This problem demonstrates the dependence of the future value of an annuity on the interest rate. Suppose $1000 is invested at the end of each year for 20 years. Calculate the future value if the investments earn an annually compounded rate of return of:
a) 9%
b) 10%
c) 11%
d) 12%
Note that the future value increases proportionately more than the interest rate.

Question

Quizplus · Accepted Answer

The Answer of This problem demonstrates the dependence of the future value of an annuity on the interest rate. Suppose $1000 is invested at the end of each year for 20 years. Calculate the future value if the investments earn an annually compounded rate of return of:
a) 9%
b) 10%
c) 11%
d) 12%
Note that the future value increases proportionately more than the interest rate.

This Problem Demonstrates the Dependence of the Future Value of an Annuity