Answer:
The answer is $13470.
Explanation:
Assuming that the interest rate is compounded per year at a rate of 8% for an initial value of $4490, over a period of 25 years.
Using the interest formula of [tex]I = P.r.t[/tex] where [tex]P[/tex] is the principal amount which is $4490, [tex]r[/tex] is the interest rate, 8%, and [tex]t[/tex] is the time involved, 25 years.
The results is found as [tex]I = 4490.0,08.25 = 8980[/tex] dollars.
The future value is the amount of interest added to the initial value which comes up to $13470.
I hope this answer helps.
Given Information:
Number of payments = n = 25
Interest rate = r = 8%
Periodic payment = $4,490
Required Information:
Future Value = ?
Answer:
Future Value = $354,505
Explanation:
The future value is found using the equation
FV = Periodic payment * [ ( (1 + r)ⁿ - 1) / r] * (1 + r)
We have n = 25, r = 0.08 and periodic payment $4,490
FV = $4,490 * [ ( (1 + 0.08)²⁵ - 1) / 0.08] * (1 + 0.08)
FV = $4,490 * [73.1059] * (1.08)
FV = $4,490*78.9543
FV = $354,505
Therefore, the future value of 25 periodic payments of $4,490 compounded at 8% is $354,505
