The FV_IFA for the future value of an annuity is 4.5 at 10% for 4 years. If we wish to accumulate $8,000 by the end of 4 years, how much should the annual payments be? A) $2,500 B) $2,000 C) $1,778 D) $2,200

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Quizplus · Accepted Answer

We know that: FV = A x FV_IFA $8,000 = A x 4.5 A = $8,000 / 4.5 A = $1,777.78 ≈ $1,778 Therefore, the annual payments should be $1,778, which is option C.

The FVIFA for the Future Value of an Annuity Is

The FV_IFA for the Future Value of an Annuity Is