What is the future value of $500 paid at the end of each quarter? (i

Finance Mar 08, 2021

What is the future value of $500 paid at the end of each quarter? (i.e. every three? months) for the next 8 years if the interest rate is 11% per? year, compounded? quarterly?

The future value of the annuity is ?$

?(Round to the nearest? dollar.)

Expert Solution

Computation of Future Value of Annuity using FV Function in Excel:

=fv(rate,nper,-pmt,pv)

Here,
FV = Future Value of Annuity = ?

Rate = 11%/4 =

Nper = 8 Years*4 Quarters = 32 Quarters

PMT = $500

PV = 0

Substituting the value in formula:

=fv(11%/4,32,-500,0)

FV or Future Value = $25,134.93

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