What is the future value of an ordinary annuity of $100 per month for two years if the interest rate is 12% per annum compounded monthly?
A)$2124.34
B)$212.00
C)$2697.35
D)$2394.47

Question

Quizplus · Accepted Answer

The future value of an ordinary annuity can be calculated using the formula: FV = Pmt * [((1 + r)^nt - 1) / r], where Pmt is the monthly payment, r is the monthly interest rate, and nt is the total number of payments. Here, Pmt = $100, r = 0.12/12 = 0.01, and nt = 24. Plugging these values into the formula gives the future value as approximately $2697.35.

What Is the Future Value of an Ordinary Annuity of $100