What is the future value in year twelve of an ordinary annuity cash flow of $6,000 per year at an interest rate of 4.00% per year?
A)$90,154.83
B)$93,761.02
C)$28,675.97
D)$32,117.08

Question

Quizplus · Accepted Answer

The future value of an ordinary annuity is calculated using the formula:FV = PMT * [(1 + r)^n - 1] / rwhere:PMT is the annual paymentr is the annual interest raten is the number of yearsIn this case, PMT = $6,000, r = 4.00%, and n = 12. Plugging these values into the formula, we get:FV = $6,000 * [(1 + 0.04)^12 - 1] / 0.04= $6,000 * [1.5735 - 1] / 0.04= $6,000 * 0.5735 / 0.04= $90,154.83Therefore, the future value in year twelve of the ordinary annuity is $90,154.83.

What Is the Future Value in Year Twelve of an Ordinary