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30 May, 23:19

What is the future value of 24 periodic payments of $5,070 each made at the beginning of each period and compounded at 8%? (Round factor values to 5 decimal places, e. g. 1.25124 and final answer to 0 decimal places, e. g. 458,581.)

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  1. 31 May, 02:18
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    Future Value = $365,577.12

    Explanation:

    Giving the following information:

    n = 24 years

    i = 8%

    Annual payments = $5,070

    Because the payments are made at the beginning of the year, we need to include an additional interest period. We will use the following formula:

    FV = {A*[ (1+i) ^n-1]}/i + {[A * (1+i) ^n]-A}

    FV = {5,070*[ (1.08^24) - 1]} / 0.08 + {[5,070 * (1.08^24) ] - 5,070}

    FV = 338,497.33 + 27,079.79

    FV = $365,577.12
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