Business Finance
Business and Finance

Question Description

Can you help me understand this Business question?

Find future value of an annuity due with annual payment $10000, 3years at 3% annual interest using simple interest formula. What is the future value of Annuity? How much invested? How much interest was earned? Round to nearest cent as needed

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Final Answer

Interest on First annuity = 10000*0.03* 2 =100*3*2 =600

Interest on second annuity = 10000*0.03*1 =100*3*1 =300

Total annuity paid = 10,000+10,000 =20,000

Total interest =600+300 =900

Total invested =20,000 if we leave third payment

Total invested =30,000 if we include third payment


madhavant (2757)
UT Austin

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