Future value of an annuity: Carlos Menendez is planning to invest $3,500 every year for the next six years in an investment paying 12 per cent annually. What will be the amount he will have at the end of the six years? (Round to the nearest dollar.)

Question

Quizplus · Accepted Answer

The future value of an annuity can be calculated using the formula: FV = Pmt * [((1 + r)^n - 1) / r], where Pmt is the annual payment, r is the annual interest rate, and n is the number of years. Plugging in the values: FV = $3,500 * [((1 + 0.12)^6 - 1) / 0.12] = $28,403.

Future Value of an Annuity: Carlos Menendez Is Planning to Invest