Find the amount of an annuity of payments of $150 at the end of every month for 3 years at the rate of 49 compounded monthly

Finance Dec 23, 2020

Find the amount of an annuity of payments of $150 at the end of every month for 3 years at the rate of 49 compounded monthly. (Round your answer to nearest Dollar) $7,141 $6,487 $5,727 $5,487 $7.727

Expert Solution

It is the case of Future value annuity. Therefore future value will be

= A * ((1 + r)ⁿ - 1 )/r

= 150 * ((1 + 0.04/12 )^3*12 -1) / (0.04/12)

= 150 *38.18156

= $5727

Therefore C is correct answer.

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