An annuity pays $55 per year for 21 years. What is the future value (FV) of this annuity at the end of those 21 years,given that the discount rate is 6%?A. $2,199.60O B. $3,079.44O C. $1,319.76O D. $2,639.52

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future value

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

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Question

An annuity pays $55 per year for 21 years. What is the future value (FV) of this annuity at the end of those 21 years,
given that the discount rate is 6%?
A. $2,199.60
O B. $3,079.44
O C. $1,319.76
O D. $2,639.52

Expert Solution

Step 1

Future value is the value of money or asset in the future. It is very important to investors and planners because it is used to estimate investment made today worth in future.

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