Your employer gives you a bonus of $2,000 at the end of each year. How much will you have at the end of 5 years if you earn an 8% return over that time?
FV of AN=nnuity CF = CF * [ (1+r)^n - 1 ] / r
r is int rate
n is no. of years
= $ 2000 [ (1+0.08)^5 - 1 ] / 0.08
= $ 2000 [ (1.08^5) - 1 ] / 0.08
= $ 2000 [ 1.4693 - 1 ] / 0.08
= $ 2000 * 0.4693 / 0.08
= $ 11,733.20
Pls comment, if any further assistance is required.
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