Find the future value of an ordinary annuity of $700 paid at the end of each year for 4 years, if interest isearned at a rate of 6%, compounded annual.The future value is $(Round to 2 decimal places.)

interest rate =6% Period =4 years Future value FACTOR =(1+r)n-1/r Future value FACTOR…

Answered: The future value is $ (Round to 2…

Business

Accounting

The future value is $ (Round to 2 decimal places.)

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 20E

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Question

Find the future value of an ordinary annuity of $700 paid at the end of each year for 4 years, if interest is
earned at a rate of 6%, compounded annual.
The future value is $
(Round to 2 decimal places.)

Expert Solution

Step 1

interest rate =6%

Period =4 years

Future value FACTOR =(1+r)ⁿ-1/r

Future value FACTOR =(1.06)⁴-1/0.06

Future value FACTOR =4.374

Future value =Future value FACTOR x annual payment

Future value =4.374 ×700

Future value =$3061.80

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