To calculate the future value of an annuity with a monthly payment and an annual interest rate of 4%, you would use the formula:
FV = P * [(1 + r/12)^(12n) - 1] / (r/12)
Where:
FV = Future Value
P = Monthly payment
r = Monthly interest rate
n = Number of years
In this case, the annual interest rate is 4% which corresponds to a monthly interest rate of r = 0.04/12 = 0.003333...
Therefore, the value of r that must be substituted into the formula is approximately 0.003.
An annuity account earns monthly payments and has an annual interest rate of 4 percent. What value of r must be substituted into the formula to calculate the future value of the annuity? Round the value to the nearest thousandth.(1 point)%0AResponses%0A%0A0.003%0A0.003%0A%0A0.020%0A0.020%0A%0A0.001%0A0.001%0A%0A0.040
1 answer
1 answer