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A periodic deposit is made into an annuity with the given terms. Find how much the annuity will hold at the end of the specified amount of time. Round your answer to the nearest dollar.Regular deposit:$1300Interest rate:4.2%FrequencyannuallyTime:17 yearsFuture value: $

A periodic deposit is made into an annuity with the given terms Find how much the annuity will hold at the end of the specified amount of time Round your answer class=

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SOLUTION

We will use the formula

[tex]FV=P\lbrack\frac{(1+r)^n-1}{r}\rbrack[/tex]

Where FV represents the future value annuity

P = Periodic payment = 1300

r = interest rate = 4.2% = 0.042

n = number of periods = 17 years.

So we have

[tex]\begin{gathered} FV=P\lbrack\frac{(1+r)^n-1}{r}\rbrack \\ FV=1300\lbrack\frac{(1+0.042)^{17}-1}{0.042}\rbrack \\ FV=1300\lbrack\frac{(1.042)^{17}-1}{0.042}\rbrack \\ FV=31,341.485 \end{gathered}[/tex]

Hence, the answer becomes $31,341 to the nearest dollar

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