Johnson has an annuity due that pays $600 per year for 15 years. (Note: There are 15 annual cash flows with the first cash flow occurring today.)
What is the value of the cash flows 14 years from today (immediately after the last deposit is made) if they are placed in an account that earns 7.50%?
A) $9,000.00
B) $9,675.00
C) $15,671.02
D) $16,846.35
Answer: C
Explanation: C) FV = PMT × = $600 × = $15,671.02.
MODE = END
INPUT 15 7.5 0 -600 ?
KEY N I/Y PV PMT FV
CPT 15,671.02
In this case, the computation is made as if this is an ordinary annuity beginning one year ago with the first payment made today
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