This problem demonstrates the dependence of an annuitys future value on the size of the periodic payment.

Question:

This problem demonstrates the dependence of an annuity’s on the size of the periodic payment. Suppose a fixed amount will be invested at the end of each year and that the invested funds will earn 8% compounded annually. What will be the of the investments after 25 years if the periodic investment is:
a. $1000 per year?
b. $2000 per year?
c. $3000 per year?
Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...