Question

Calculate the value of the annuity due without a table. (Do not round intermediate calculations. Round your answer to the nearest cent.)

Amount of payment		Payment payable	Years	Interest rate	Value of annuity
$2,900		Annually	3	6%	$

Answer 1

Information provided:

Annual payment= $2,900

Time= 3 years

Interest rate= 6%

The question is concerning finding the future value of an annuity due. Annuity due refers to annuity that occurs at the beginning of a period.

This can be solved using a financial calculator by inputting the below into the calculator:

The financial calculator is set in the end mode.  Annuity due is calculated by setting the calculator to the beginning mode (BGN). To do this, press 2^ndBGN 2^ndSET on the Texas BA II Plus calculator.

Enter the below in a financial calculator to compute the future value of annuity due:

PMT= -2,900

N= 3

I/Y= 6

Press the CPT key and FV to compute the future value of annuity due.

The value obtained is 9,786.39.

Therefore, the value of annuity due is $9,786.39.

In case of any query, kindly comment on the solution.