Question

Find the accumulated value of an ordinary simple annuity of Rs 3 000 per year for 7 years, if money is worth j1=8%

Answer 1

P = Periodic payments

r = rate of interest

n = no of years

Future Value of Annuity $= \frac{P ( (1 + r)^n - 1 ) }{ r}$

$= \frac{3000 \times ((1 + 8\; \%)^7 - 1) }{ 8\; \%} \\ = 26768.41$