Future Value of an Annuity What is the future value of a $1,000 annuity payment over 4 years if the interest rates are 8 percent?
A)$3312.10
B)$4320.00
C)$4506.11
D)$9214.20

Question

Quizplus · Accepted Answer

Using the formula for future value of an annuity:
FV = Pmt x [((1 + r)^n - 1)/r]
where Pmt = $1,000, r = 8% or 0.08, and n = 4.
FV = 1000 x [((1 + 0.08)^4 - 1)/0.08] = $4,506.11
Therefore, the correct answer is (C).

Future Value of an Annuity What Is the Future Value