Computation of Future value
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Wiseman Video plans to make four annual deposits fo $2,000 each to a special building fund. The fund's assests will be invested in mortgage instruments expected to pay interest at 12% on
the fund's balance. Using the appropriate annuit table determine how much will be accumulated in the fund on December 31, 2009 under each of the following situations.
annual deposit amount Deposit Date Interest
2,000 12/31/2006 compounded annually
2,000 12/31/2005 compounded annually
2,000 12/31/2005 compounded quarterly
2,000 12/31/2005 interest is compounded annually and interest earned is withdrawn at the end of each year
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Solution Summary
The answer shows the computation of future value of money by taking different examples
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2,000 12/31/2006 compounded annually
Here we have to find the compounded value of annuity for 3 years
F=A*((1+r)^n-1)/r
F=Future value, A= Annuity r= rate of interest n=duration
A= $2000, r= 12%, n=3, Thus Future ...
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