Don made deposits of $500 at the end of each year for eight years. The rate is 8% compounded annually. Using the tables found in the textbook, calculate the value of Don's annuity at the end of eight years.
The future value of an annuity is given by the formula [tex]FV=P\left[\frac{\left(1+r\right)^n-1}{r}\right][/tex] where FV is the future value P is the periodic payment n is the number of periods r is the rate
Substituting the given values into the formula, we have [tex]FV=500\left[\frac{\left(1+0.08\right)^8-1}{0.08}\right]=5318.31[/tex]
The value of Don's annuity at the end of 8 years is $5,318.31.
