Ann wants to save money to open a tutoring center She buys a

Ann wants to save money to open a tutoring center. She buys an annuity with a monthly payment or so that pa Payments will be made at the end of each month. Find the total value of the annuity in 9 years Do not round any intermediate computations, and round your final answer to the nearest cent. If necessary, refer to the list of financial formulas. ys 31% interest, compounded monthly.

Solution

Total Value of annuity in 9 years $ 4,104.68 Working: a. Future Value of annuity of 1 = (((1+i)^n)-1)/i Where, = (((1+0.002583)^108)-1)/0.002583 i 3.1%/12 = 0.002583 = 124.384227 n 9*12 = 108 b. Future Value of annuity of $ 33 = Annuity x Future Value of annuity of 1 = $ 33 x 124.3842 = $   4,104.68