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Future Value of Annuity Sample Assignment

Question: A 4 year annuity of Rs. 3,000 per year is deposited in a bank account that pays 9% interest compunded yearly. The annuity payments begin in year 12 from now. What is the Future value of the annuity?

Answer: The Future value (FV) of an annuity is calculated as

                                              FV    =    Annuity Amount x CVAF _{(r, n)}

                                         where r =   Rate of interest = 9%

                                                    n =   time period = 3

                                        and CVAF _{(9%, 3)}  = Compunded Value of Annuity factor =  4.573

                                       Therefore,   FV  =   Rs. 3,000  x  4.573

                                                                  =   Rs. 13,719

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Other Sample Assignments in Finance Homework Assignment :

Time Value of money	Future Value of Annuity
Current working capital cycle	Operating Cycle
Receipt And Payments Method Of Preparation Of Cash	Equiyty Per Share

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