Anthony deposits $650 into an annuity at the end of every quarter for 5 years. The fund holds international stocks, and it yields about 12% compounded quarterly. Find the interest earned after 5 years.
The future value annuity is given by: FV=P[(1+r)^n-1]/r where: P=principle=$650 r=rate=0.12/4=0.03 t= time=5×4=20 Hence our future value annuity will be: FV=650[(1+0.03)^20-1]/0.03 FV=650×0.80611/0.03 FV=650×26.870375 FV=$17,465.75 The answer is $17,465.75
