An annuity pays $12 per year for 100 years. What is the future value (FV)of this annuity at the end of those 100 years, given that the discount rate is 8%?

Question

Quizplus · Accepted Answer

The future value of an annuity can be calculated using the formula FV = P * [((1 + r)^n - 1) / r], where P is the payment per period, r is the interest rate per period, and n is the number of periods. In this case, P = $12, r = 0.08, and n = 100. Plugging these values into the formula gives the future value of the annuity as approximately $329,814.

An Annuity Pays $12 Per Year for 100 Years