This problem demonstrates the dependence of an annuity's future value on the size of the periodic payment. Suppose a fixed amount will be invested at the end of each year and that the invested funds will earn 8% compounded annually. What will be the future value of the investments after 25 years if the periodic investment is:
a. $1000 per year?
b. $2000 per year?
c. $3000 per year?
(Note that the future value of an annuity is proportional to the size of the periodic payment.)

Question

Quizplus · Accepted Answer

The Answer is a) $73,105.94
b) $146,211.88
c) $219,317.82

This Problem Demonstrates the Dependence of an Annuity's Future Value