Question

In an attempt to have funds for a down payment, Jan Carlson plans to save $3,850 a year for the next five years. With an inte

1% Exhibit 1-B Future value (compounded sum) of $1 paid in at the end of each pe Period 2% 3% 4% 5% 1.000 1.000 1.000 1.000 1

0 0
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Answer #1

Future value of annuity = payment per period * [(1+i)^n-1]/i

i = interest rate per period

n = number of periods

=>

Future value of annuity

= 3850 * [(1+0.08)^5 - 1]/0.08

= 3850 * 5.867

= 22587.95

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