5.3 The Future Value of a Series of Amounts (Annuity)
Annuity
What uses can you think of for the future value and present value calculations?
What is the future value of three SAR 100 deposits made at the end of each of the next three years, and earning 10% per year?
What amount would Sara have in five years if she invested SAR 1,200 each year at a rate of 3%?
Ali makes three annual deposits of SAR 500, each earning 5%. What is the future value of the investment?
Nora invests SAR 250 each year for six years into her investment account which earns her 6% per year. What is her total investment at the end of six years?
Every series of deposits is an annuity.
The future value of a series of amounts may be used to calculate the future value of an annuity.