what is the future value of $490 per year for ten years compounded annually at 11%
490 * 1.11^10
To calculate the future value of $490 per year for ten years compounded annually at 11%, we can use the formula for the future value of an ordinary annuity:
Future Value = Payment * [(1 + interest rate)^number of periods - 1] / interest rate
In this case, the payment is $490 per year, the interest rate is 11% (or 0.11), and the number of periods is ten years. Plugging these values into the formula, we can calculate the future value.
Future Value = $490 * [(1 + 0.11)^10 - 1] / 0.11
Now, let's calculate the future value step by step:
1. Add 1 to the interest rate: 1 + 0.11 = 1.11
2. Raise the result to the power of the number of periods: 1.11^10 = 2.8531167065
3. Subtract 1 from the result: 2.8531167065 - 1 = 1.8531167065
4. Divide the payment by the interest rate: $490 / 0.11 = 4454.54545455
5. Multiply the result by the value obtained in step 3: 4454.54545455 * 1.8531167065 = $8250.55
Therefore, the future value of $490 per year for ten years compounded annually at 11% is approximately $8250.55.