Chapter AG, Problem G.7BE

To determine

Future Value: The future value is value of present amount compounded at an interest rate until a particular future date. The future value of an amount is calculated by using the following formula:

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

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

To determine: The amount of annuity payment that S has to make at the end of each year for 8 years.