The future value of an ordinary annuity of $1,000 each year for 10 years, deposited at 3 percent, is ________.
A) $11,808.
B) $11,464.
C) $ 8,530.
D) $10,000.

Question

Quizplus · Accepted Answer

The future value of an ordinary annuity formula is:

FV = PMT x (((1 + r)^n - 1) / r)

Where PMT is the payment, r is the interest rate per period, and n is the number of periods.

Plugging in the given values, we get:

FV = 1,000 x (((1 + 0.03)^10 - 1) / 0.03)
FV = $11,463.98 (rounded to the nearest cent)

Therefore, the answer is B, $11,464.

The Future Value of an Ordinary Annuity of $1,000 Each