Question

What is the value in 2030 of a $700 a year annuity with the first payment occurring in 2017 and the final payment in 2025? The interest rate is 6% p.a.

a) $13,217.5

b) $12,347.21

c) $10,764.58

d) $11,410.46

Answer 1

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

v . x W 1502 ENG 07 01 2020 21 P783 - X V fx MN 768 769 FINANCIAL FORMULA A = ANNUAL DEPOSIT RATE YEARS 700 6% 9 [FROM 2017 TO 2025] WE HAVE TO CALCULATE FUTURE VALUE OF ANNUITY FOR 9 YEARS FVA = A*(1/r)*((1+r)^n - 1) FVA = 700®(1/0.06)*((1+0.06)^9-1) FVA = 700 11.49131598 FVA = 8043.92 770 771 772 773 774 775 776 777 778 779 780 781 782 783 784 785 786 787 788 789 THE ABOVE VALUE WILL BE TAKEN AS PRESENT VALUE AND WILL BE INVESTED FOR 5 YEARS 8043.92 PRESENT VALUE = YEARS = FV = FV = FV = PV*(1+r)^n 8043.92* (1+0.06)45 10764.58 ANSWER:C: 790 791 792 793 794 795 796 797 798 ... pv, lv, annuily CAP STRU VALUE PM, PMT loan with points LOCK BOX DILUTION DOLLAR COST AVG EXPO NPER APR CPI ear FVA pva 2 53 STATE 56 57 58 ... 6