Chapter AG, Problem G.5BE

To determine

Future Value: The future value is value of present amount compounded at an interest rate until a particular future date. The following formula is used to calculate the future value of an amount:

$\text{Future value of an amount = Present value}\times {\left(\text{1+ Interest rate}\right)}^{\text{Number}\text{of}\text{periods}}$

Future value of an annuity refers to an amount received or paid equally for a specified number of periods with equal intervals for the investment made.

To Compute: The future value of a single amount and of an annuity amount (if the interest compounded annually).