You are going to invest $1,000 at the end of each year for five years. Given...

Question

Question

You are going to invest $1,000 at the end of each year for five years. Given an interest rate, you can find the future value

Answer 1

Answer #1

Future value of an annuity can be compute using

1). by calculating FV of all the annuity/Cash flows and adding them all.

2). by discounting all the annuity/cash flow to present value, adding them up and then calculating Future value of this lump sum.

So both II and IV statements are correct.

So option D is correct.

Answer 2

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