What is the future value of a $500 annuity payment over 8 years if interest rates are 14%?
A) $6,241.09
B) $6,616.38
C) $6,750.14
D) $6,809.72

Question

Quizplus · Accepted Answer

We can use the following formula to calculate the future value of an annuity payment:

FV = Pmt x [(1 + r)^n - 1] / r

where:
Pmt = annuity payment ($500)
r = interest rate (14% or 0.14)
n = number of payment periods (8)

FV = 500 x [(1 + 0.14)^8 - 1] / 0.14
FV = $6,616.38

Therefore, the best choice is B.

What Is the Future Value of a $500 Annuity Payment