The future value of an ordinary annuity of $1,000 each year for 10 years,deposited at 3 percent,is ________.
A)$11,808.
B)$11,464.
C)$8,530.
D)$8,786.

Question

Quizplus · Accepted Answer

We can use the formula for future value of an ordinary annuity:

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

where PMT is the annual payment, r is the interest rate, and n is the number of payments.

Plugging in the numbers, we get:

FV = 1,000 x [(1 + 0.03)^10 - 1] / 0.03
FV = $11,464.16

Therefore, the answer is B - $11,464.

The Future Value of an Ordinary Annuity of $1,000 Each