Question

Find the future value of an annuity of Rs. $500$ made annually for $7$ years at interest rate of $14\%$ compounded annually. Given that $(1.14{)}^7=2.5023$.

• A. $5,563.25$
• B. $5,365.35$
• C. $5,365.53$
• D. $5,356.35$

Answer 1

The correct option is B $5,365.35$

Annual payment A$=$Rs. $500$
$n=7$
$i=14\%=0.14$
$A(7,0.14)=500\left[\frac{(1+1.014{)}^7-1}{0.14}\right]$
$=$Rs. $5365.35$