An investor wants to save money to purchase real estate. He deposits $550 at the end of each year in an ordinary annuity that pays 4% interest, compounded annually.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...
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An investor wants to save money to purchase real estate. He deposits $550 at the end of each year in an ordinary annuity that
pays 4% interest, compounded annually.
Answer each part. Do not round any intermediate computations nor answers. If necessary, refer to the list of financial formulas.
(a) Find the total value of the annuity at the end of the 1 year.
st
24
(b) Find the total value of the annuity at the end of the 2
nd
year.
(c) Find the total value of the annuity at the end of the 3
rd
year.
Transcribed Image Text:An investor wants to save money to purchase real estate. He deposits $550 at the end of each year in an ordinary annuity that pays 4% interest, compounded annually. Answer each part. Do not round any intermediate computations nor answers. If necessary, refer to the list of financial formulas. (a) Find the total value of the annuity at the end of the 1 year. st 24 (b) Find the total value of the annuity at the end of the 2 nd year. (c) Find the total value of the annuity at the end of the 3 rd year.
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