What's the future of a 5-year ordinary annuity that promises to pay you $300 each year? the rate of interest is 7 percent.
Please explain:
2007-03-26 13:54:04 · 4 answers · asked by Anonymous in Business & Finance ➔ Investing
Do you mean Future Value? There is a number missing in the description. What is the Present Value (or the purchase price of this annuity)?
2007-03-26 14:02:16 · answer #1 · answered by 2007_Shelby_GT500 7 · 0⤊ 0⤋
Future value of the annuity is= 300(FVIFA)7%,5yrs=
=300(1+.07)^5 -1/0.07=300(5.7507)=
=1725.01.
You can use the formula (1+r)^n/r x annuity payment or look into the annuity table to get the FVIFA future value of an annuity for so many years for so much interest. If compounding is quarterly or half yearly you divide interest by 4 or 2 respectively and multiply period by 4 or 2 respectively and substitute in the formula or use the FVIFA from table.
2007-03-27 01:07:20 · answer #2 · answered by Mathew C 5 · 0⤊ 0⤋
For finance solutions
2015-02-26 17:06:34 · answer #3 · answered by Willy 1 · 0⤊ 0⤋
depends on how much U pay if U pay more than they give u. MISTAKE!
2007-03-26 14:00:22 · answer #4 · answered by Anonymous · 0⤊ 0⤋