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    Value of the annuity at maturity

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    Sam deposited $1,000 dollars today in a fixed-rate, tax-deferred annuity, which guarantees an 8% return with quarterly compounding. Commencing with the next year, he subsequently deposits $250 every 3 months at the end of the period, for the next 9 years. What is the value of the annuity at maturity?

    a. $10,720
    b. $12,999
    c. $15,038
    d. $15,298

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    Solution Preview

    Sam deposited $1,000 dollars today in a fixed-rate, tax-deferred annuity, which guarantees an 8% return with quarterly compounding. Commencing with the next year, he subsequently deposits $250 every 3 months at the end of the period, for the next 9 years. What is the value of the annuity at maturity?

    a. $10,720
    b. $12,999
    c. $15,038
    d. ...

    Solution Summary

    Calculates the future value of annuity.

    $2.19

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