Question

Suppose we have an annuity with 5 annual payments of

Rs.5000 each, starting at the beginning of the year, and the

interest rate is 10% per year. The future value of annuity is

Answer 1

Future value $=C×[ \frac{(1+i) \\^n −1}{i} ]$

Where:

C=cash flow per period

i=interest rate

n=number of payments

​$Future\ Value=5000 ×[ \frac{(1.1) \\^5 −1}{0.1} ]$

Future value = 30525.5