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Future Value of an Ordinary Annuity

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Dan plans to fund his IRA with a contribution of $2,000 at the end of each year for the next 10 years. If he earns 10% on his contributions how much will he have at the end of the 10th year.

A. $12,290

B. $51,880

C. $31,874

D. $20,000

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Solution Summary

The solution includes detailed steps of calculating the future value of the ordinary annuity.

Solution Preview

This can be calculated by the formula of the Future Value of an Ordinary Annuity:
FV = P * [((1 +i)^n - 1) / ...

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