Answer:
The future value of an annuity (FVA) is $828.06
Explanation:
The future value of an annuity (FVA) is the value of payments at a specific date in the future based on the payments being recurring and assuming a discount rate. The future value of an annuity (FVA) is based on regular cash flow. The higher the discount rate, the greater the annuity's future value.
[tex]FVA= P * \frac{(1+r)^n-1}{r}[/tex]
Where:
FVA is The future value of an annuity (FVA)
P is payment per period
n is the number of period
r is the discount rate
Given that:
P = $195
r = 4% = 0.04
n = 4 years
[tex]FVA= P * \frac{(1+r)^n-1}{r}[/tex]
substituting values
[tex]FVA= 195 * \frac{(1+0.04)^4-1}{0.04}=195*4.246=828.06\\FVA=824.06[/tex]
The future value of an annuity (FVA) is $828.06
Answer:
$828.26
Explanation:
FVA ( future value of annuity ) = P *[tex]\frac{(1+r)^{n}-1 }{r}[/tex]
p ( principal amount ) = $195
r (interest rate) = 4% = 0.04
n ( number of years) = 4
therefore to calculate the FVA we will into the following values into the given equation
FVA = 195 * [tex]\frac{(1+0.04)^{4}-1 }{0.04} = 195 * \frac{1.1699 - 1}{0.04}[/tex]
= 195 ( 0.1699 / 0.04 ) = $828.26
The future annuity will be $828.26
