# What is the future value of a $900 annuity payment over five years if interest rates are 8 percent?

**Solution:**

The future value of n is written as

FV = P × [(1 + r)^{n} - 1]/r

Where P = Value of each payment

= $900

r = Rate of interest per period in decimal

= 8% = 0.08

n = Number of periods = 5

Substituting these values in the formula

FV = 900 × [(1 + 0.08)^{5} - 1]/0.08

FV = 900 × [(1.08)^{5} - 1]/0.08

By further calculation

FV = 900 × [1.469 - 1]/0.08

FV = 900 × (0.469)/0.08

So we get,

FV = 900 × 5.866

FV = $5279.94

Therefore, the future value is $5279.94.

## What is the future value of a $900 annuity payment over five years if interest rates are 8 percent?

**Summary:**

The future value of a $900 annuity payment over five years if interest rates are 8 percent is $5279.94

Math worksheets and

visual curriculum

visual curriculum