TVM07 - Future Value of an Annuity

Audio Transcript

This is a future value of an annuity problem.

What is the future value of $6,000 deposits made at the end of the next six years earning interest of 8.5%?

First, plug in the known values into the appropriate cells:

The number of periods – NPER – is 6

The interest rate – Rate – is 8.5%

The payment – PMT – is $6,000

Going to the formulas tab, look for the FV function.

The function wizard pops up

Select Rate,

Select NPER,

Select PMT

Hit OK

The FV is $44,574