What is the future value of an annuity due if your required return is 10%, and payments are $1,000 for 10 years?
A) $11,000
B) $17,531
C) $15,937
D) $16,145

Question

Quizplus · Accepted Answer

The future value of an annuity due can be calculated using the formula: FV = P * [((1 + r)^n - 1) / r] * (1 + r), where P is the payment amount, r is the periodic interest rate, and n is the number of periods. Here, P = $1,000, r = 10% or 0.10, and n = 10. Plugging these values into the formula gives FV = $1,000 * [((1 + 0.10)^10 - 1) / 0.10] * (1 + 0.10) = $17,531 (rounded to the nearest dollar).

What Is the Future Value of an Annuity Due If