What is the future value of $20 a week for 10 years at 6 percent interest? Assume the first payment occurs at the end of this week.

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Quizplus · Accepted Answer

The future value of an annuity is the sum of the present values of each of the payments. The present value of each payment is the payment divided by (1 + r)^n, where r is the interest rate and n is the number of periods. In this case, the interest rate is 6% and the number of periods is 10 * 52 = 520. The present value of each payment is $20 / (1 + 0.06)^520 = $14.23914. The future value of the annuity is the sum of the present values of each of the payments, which is $14.23914 * 520 = $14,239.14.

What Is the Future Value of $20 a Week for 10