question archive (Future value of an annuity) Find the future value at the end of year 10 of an annuity that pays $1,000 per year for 10 years compounded annually at 10 percent
(Future value of an annuity) Find the future value at the end of year 10 of an annuity that pays $1,000 per year for 10 years compounded annually at 10 percent
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(Future value of an annuity) Find the future value at the end of year 10 of an annuity that pays $1,000 per year for 10 years compounded annually at 10 percent. What would be the future value of this annuity if it were compounded annually at 15 percent?
What would be the future value of this annuity if it were compounded annually at 10 percent? $ (Round to the nearest cent.)
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Answer-
Annual payments = PMT = $ 1000
Present value= PV = $ 0
Interest rate = I/Y = 10 % / annum
Number of years= N =10
Future value = FV = ?
Substituting the values in financial calculator we get
Future value = $ 15937.42
If Interest rate = I/Y = 15 % / annum
Substituting the values in financial calculator we get [ Usinfg the same values as above and just changing interest rate= I/Y = 15 % instead of 10 % we get ]
Future value = $ 20303.72
Future value of annuity for 10 % = $ 15937.42 and for 15 % = $ 20303.72
