Episode 17 — Finance Growth and Decay

Future Value Annuities

Learners will be able to:

• Describe the different types of annuities and their characteristics. • Calculate the future value of an ordinary annuity using the formula: FV = x × (1 + i)^(n - 1) / i. • Determine whether a given investment scenario is an ordinary or annuity due, and apply the correct formula to calculate its future value. • Solve for the monthly payment in an ordinary annuity given the future value, interest rate, and number of payments. • Derive and explain the formula for the future value of an ordinary annuity using geometric series.