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mitzi 1978 · May 30, 2007, 02:28 PM

What is the future value of a 5 year ordinary annunity that prosises to pay you $300.00 each year? The rate of interest is 7 percent.

I would like you to show mw how you got this answer? I am trying to learn how to use a scientific calculator, I never used one before.

Thank you,

Mitzi

rafian · May 31, 2007, 02:56 PM

Formula = PMT (1+i)^n-1 + PMT (1+i)^n-2 + PMT (1+i)^n-3 + PMT (1+i)^n-4 + PMT (1+i)^n-5

Solution = 300 (1+.07)^4 + 300 (1+.07)^3 + 300 (1+.07)^2 + 300 (1+.07)^1 + 300 (1+.07)^0

= 393.24 + 367.51 + 343.47 + 321 + 300

=1,725.22

PMT = Payment

I = interest

n = Time