We can use the formula for the future value of an ordinary annuity:
FV = PMT * [((1+r)^n - 1) / r]
where:
PMT = the periodic payment
r = the interest rate per period
n = the number of periods
In this case, PMT = $1000 (the annual payment), r = 0.09 (9% per year, compounded annually), and n = 10 (the number of years).
Plugging in these values, we get:
FV = $1000 * [((1+0.09)^10 - 1) / 0.09] ≈ $16,386.45
Therefore, the accumulated amount in the annuity is approximately $16,386.45.
Use the ordinary annuity formula to determine the accumulated amount in the annuity. Round to the nearest cent.
$1000 invested annually for 10 years at 9 % interest compounded annually
1 answer
1 answer