Peter will receive $1,200 at the beginning of each of the next seven years.What is the future value of this annuity,assuming the interest rate is 9% compounded annually? (Round to the nearest whole dollar)
A) $1,200
B) $11,041
C) $12,034
D) $13,234
E) $8,400

Question

Quizplus · Accepted Answer

FV = PMT × 11ea7fdb_fc17_9317_a768_693a0136f305_TB2902_11 × 11ea7fdb_fc17_9318_a768_4dc4013c0c18_TB2902_11 FV = 1,200 × 11ea7fdb_fc17_9319_a768_6b1b00e50bf3_TB2902_11 × 11ea7fdb_fc17_931a_a768_6355c3b5193b_TB2902_11 = $12,034.17
Using a financial calculator:
N = 7, I/Y = 9, PV = 0, PMT = -1200, cpt FV = 11,040.52
11,040.52 × 1.09 = $12,034.17

Peter Will Receive $1,200 at the Beginning of Each of the Next