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# Annuities

Module by: Maggie Perumal. E-mail the author

Summary: Calculating annuities for money invested at the beginning of the year

## FINANCIAL MATHS

### Exercise 1

An amount of R2000 is deposited at the beginning of the year every year. What is the amount at the end of 3 years if interest is paid at the rate of 7,2% p.a , compounded annually?

#### Solution

SOLUTION:

Fv= x(1+i)1+x(1+i)2+ x(1+i)3 where a = x(1+i)= 2000(1+0,072) r = 1+i = 1,072 and n=3

Fv = A = 2000 ( 1,072 ) ( 1,072 3 1 ) 0,072 Fv = A = 2000 ( 1,072 ) ( 1,072 3 1 ) 0,072 Fv = A = {2000(1,072)(1,072^3-1)} over {0,072}

= R6906.21

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A lens is a custom view of the content in the repository. You can think of it as a fancy kind of list that will let you see content through the eyes of organizations and people you trust.

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