The future value of a $500 ordinary annuity received for three years is $________ ,assuming an investment rate of 10%:
A)1,655.00
B)665.50
C)1,820.50
D)335.65

Question

Quizplus · Accepted Answer

The future value of an ordinary annuity can be calculated using the formula FV = P * [(1 + r)^n - 1] / r, where P is the payment amount, r is the interest rate per period, and n is the number of periods. Plugging in the values ($500, 10% or 0.10, and 3 years), we get FV = 500 * [(1 + 0.10)^3 - 1] / 0.10 = $1,655.00.

The Future Value of a $500 Ordinary Annuity Received for Three