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Homework answers / question archive / In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period
In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period.
Find the accumulated amount of the annuity. (Round your answer to the nearest cent.)
$1000 monthly at 6.4% for 20 years.
Since the payment frequency is monthly , interest is also compounded monthly
Monthly rate = 6.4%/12 = 0.005333
No of payments = 20* 12 = 240
Accumulated value
= Future value of annuity
=1000/0.005333*(1.053333^240-1)
=$484580.15
