Question

Future value of ordinary annuity

what is the future value of an annuity if the size of each payment is 20,000 payable at the end of each year for 3years at an interest of 9% compounded Annually ?

Answer 1

$FVA_{Ordinary}=P\times\frac{[(1+r)^{n}-1]}{i}$

$FVA_{Ordinary}=20,000\times\frac{[(1+0.09)^{3}-1]}{0.09}=20,000\times3,2781=65,562$