Business and Finance

Question Description

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

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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