Problema Solution
Find the amount of an ordinary annuity for 5 years of quarterly payments of $2,200 that earn interest at 4% per year compounded quarterly.
Answer provided by our tutors
R = $2,200 periodic payment
t = 5 years
n = 4t = 4*5 = 20 compounding periods
r = 0.04 or 4/% annual rate
i = r/4 = 0.04/4 = 0.01 interest rate per period
S = future value
S = R[((1 + i)^n - 1)/i]
S = 2200[((1 + 0.01)^20 - 1)/0.01]
S = $48,441.81
click here to see the step by step calculation:
the amount of the ordinary annuity is $48,441.81.