# What is the Future Value of a $900 Annuity Payment over Five Years if Interest Rates are 8 Percent?

We will be using the formula of the future value of an annuity to solve this.

## Answer: The Future Value of a $900 Annuity Payment over Five Years, if Interest Rates are 8 Percent, is $5279.94

Let's solve this step by step.

**Explanation:**

The future value of an n is given by:

FV = P × [(1 + r)^{n }− 1] / r

where,

- P = Value of each payment
- r = Rate of interest per period in decimal
- n = Number of periods

Given that, P = $900, r = 8% = 0.08, n = 5.

Substitute the above values in the below equation:

FV = P × [(1 + r)^{n }− 1] / r

FV = 900 × [(1 + 0.08)^{5} − 1] / 0.08

FV = 900 × [(1.08)^{5} − 1] / 0.08

FV = 900 × [1.469 − 1] / 0.08

FV = 900 × (0.469) / 0.08

FV = 900 × 5.866

FV = $5279.94