Find the value of an ordinary annuity in which regular payments of P dollars are made at the end of each
compounding period, n times per year, at an interest rate r for t years.
-$$P = \$ 250 , n = 4 , r = 4 \% , t = 35 \mathrm { yr }$$
A) $756.77
B) $75,677.48
C) $100,677.48
D) $10,415.07

Question

Quizplus · Accepted Answer

The value of an ordinary annuity can be calculated using the formula $$A = P \frac{(1 + r/n)^{nt} - 1}{r/n}$$, where $A$ is the future value of the annuity, $P$ is the payment per period, $r$ is the annual interest rate (in decimal form), $n$ is the number of compounding periods per year, and $t$ is the time in years. Substituting the given values: $P = 250$, $n = 4$, $r = 0.04$, and $t = 35$, we get $$A = 250 \frac{(1 + 0.04/4)^{4*35} - 1}{0.04/4}$$. Calculating this gives us approximately $75,677.48.

Find the Value of an Ordinary Annuity in Which Regular P=$250,n=4,r=4%,t=35yrP = \$ 250 , n = 4 , r = 4 \% , t = 35 \mathrm { yr }P=$250,n=4,r=4%,t=35yr

Find the Value of an Ordinary Annuity in Which Regular $P = \$ 250 , n = 4 , r = 4 \% , t = 35 \mathrm { yr }$