Problema Solution
What is the future value of $500 per year for 10 years compounded annually at 5 percent
Answer provided by our tutors
R = $500 the periodic payment
t = 10 years
i = 0.05 or 5% the interest rate per period
n = 10 total number of periods
S = future value
S = R[((1 + i)^n - 1)/i]
S = 500[((1 + 0.05)^10 - 1)/0.05]
S = $6,288.95
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the future value is $6,288.95.