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Find the future value of the following annuity due. Then determine how much of this value is from contributions and how much
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Answer #1

Future value of annuity due = (1+r)*Annual amount*[{(1+r)^n – 1}/r]

Semi-annual interest = 9.52/2 =4.76%

= (1.0476)*950*[{(1.0476)24 – 1}/0.0476]

= $42,918.94

From contributions = 950*12*2 = $22,800

Interest = 42,918.94 – 22,800

= $20,118.94

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