CONSUMER MATHEMATICS
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Computing the value of an annuity for its first few years
Amy wants to save money for her son's college tuition. She deposits $\$ 825$ at the end of each year in an ordinary annuity that pays $4 \%$ interest, compounded annually.
Answer each part. Do not round any intermediate computations nor answers. If necessary, refer to the list of financial formulas.
(a) Find the total value of the annuity at the end of the $1^{\text {st }}$ year.
(b) Find the total value of the annuity at the end of the $2^{\text {nd }}$ year. $\$ \square$
(c) Find the total value of the annuity at the end of the $3^{\text {rd }}$ year.
Answer
\(825 \times (1 + 0.04)^2 + 825 \times (1 + 0.04) + 825 = \boxed{2574.36}\)
Step 1 ：\(825\)
Step 2 ：\(825 \times (1 + 0.04) + 825 = \boxed{1683}\)
Step 3 ：\(825 \times (1 + 0.04)^2 + 825 \times (1 + 0.04) + 825 = \boxed{2574.36}\)
