TVM54 - Future Value of an Annuity Due

Audio Transcript

If $12,000 is deposited annually starting on January 1, 2019 and it earns 9.5%, what will the balance be on December 31, 2026?

Compute the future value of an annuity due.

Enter the known variables.

The payment, PMT, is -$12,000.

The rate is 9.5%.

The number of periods, NPER, is 8.

The Type = 1, since payment is at the beginning of the year

We go to the Formulas tab and look for the FV function.

We click on PMT,

We click on rate,

We click on NPER.

Click on TYPE

Click OK

The future value, FV, is $147,565.

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