what is the future value of an annuity of 21 deposits of $8,700 at the end of ea
ID: 2773726 • Letter: W
Question
what is the future value of an annuity of 21 deposits of $8,700 at the end of each year with a nominal rate of interest of 6% compounded continuously, in 24 years?A. 425383.76 Or B. 425883.76 what is the future value of an annuity of 21 deposits of $8,700 at the end of each year with a nominal rate of interest of 6% compounded continuously, in 24 years?
A. 425383.76 Or B. 425883.76 what is the future value of an annuity of 21 deposits of $8,700 at the end of each year with a nominal rate of interest of 6% compounded continuously, in 24 years?
A. 425383.76 Or B. 425883.76
Explanation / Answer
Effective annual rate = e^6% -1
Effective annual rate = 2.71828^6% -1
Effective annual rate = 6.18365%
Future value = annual Deposit*((1+r)^n-1)/r * (1+r)^3
Future value = 8700*((1+6.18365%)^21 -1)/6.18365% *(1+6.18365%)^3
Future value = $ 425383.47 (approx)
Answer
A. 425383.76
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