Calculate the future value of S of an annuity using the following formula: S =R(1+i)^n-1/i) given R=250,i=0.001;n=13 please show the workout thankyou
S = 250(1.001^13 - 1)/.001
= 3269.57
after punching it in my calculator exactly that way, using x for the multiplication and using brackets the way shown in the expression
To calculate the future value (S) of an annuity using the formula S = R(1+i)^n-1/i, where R represents the regular payment, i represents the interest rate, and n represents the number of periods, you can follow the steps below:
Step 1: Substitute the given values into the formula:
R = $250
i = 0.001
n = 13
Step 2: Calculate the value of (1+i)^n:
(1+i)^n = (1+0.001)^13
Step 3: Raise the value of (1+i)^n to the power of 2:
(1+i)^n = (1+0.001)^13 = 1.013
Step 4: Subtract 1 from the value obtained in step 3:
(1+i)^n - 1 = 1.013 - 1 = 0.013
Step 5: Divide the value obtained in step 4 by the interest rate (i):
(1+i)^n - 1 / i = 0.013 / 0.001 = 13
Step 6: Multiply the result from step 5 by the payment amount (R):
S = R(1+i)^n - 1 / i = $250 * 13 = $3,250
Therefore, the future value (S) of the annuity is $3,250.