Answer:
The value after 4 years = $59,079.75
Explanation:
To calculate the value of the annuity in four years from now
we first calculate the Present value of the annuity pretending we are at the beginning of the payment year
Pv = C[1-1/(1+r)^t]/r
c= $7,000
r = 11% /2 = 0.055
t= 20 *2 = 40
Pv = 112,322.87
Then we make the Pv in 10 years the total amount the investment
A = P(1+r)^t
A = 112,322.87
r = 0.055
t= 10*2 =20
P = 38496.30
After getting the Principal amount of the investment then we can get the value after 4 years making
n = 4*2 =8
A = $59079.75
