Find the Future Value of the Annuity

question 249

Multiple Choice

Find the future value of the annuity.
-There are payments of $100 at the end of each year for 11 years at 3% interest compounded annually

• A) $1280.78
• B) $4614.11
• C) $1146.39
• D) $447.97

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Definitions:

Compounded Annually

Interest calculation method where the profit earned is added to the principal annually, enhancing the subsequent year's earnings.

Nominal Interest

The stated interest rate on a loan or investment, not accounting for inflation or compounding effects.

Compounded Nominal

Refers to the nominal interest rate which is compounded at certain intervals over a specified period but not necessarily reflecting the actual annual rate of return.

Annuity

An annuity is a financial instrument that provides a consistent series of payments to a person, often serving as a source of income for those who have retired.