Маза
$50 is invested biweekly in an
ordinary simple annuity, earning
3.5% interest per annum,
compounded biweekly. what will the
value of the annuity be in 10 years?

The value of the annuity in 10 years will be US$ 15,552.90

Step-by-step explanation:

Let's use the ordinary simple annuity formula to calculate the value of the annuity in 10 years, this way:

FV = Future value of an annuity stream

PMT = Dollar amount of each annuity payment  = US% 50

r = Interest rate = 3.5% compounded biweekly = 0.035/26

n = Number of periods in which payments will be made  = 26 * 10 = 260

FV = PMT * [(1 + r)ⁿ  − 1]/r

Now, replacing with the real values, we have:

FV = 50 *  [(1 + 0.035/26)²⁶⁰  − 1]/(0.035/26)

FV = 50 *  [(1.001346154)²⁶⁰  − 1]/0.001346154

FV = 50 * 0.41873217/0.001346154

FV = 50 * 311.058148

FV = 15,552.90

We only rounded the last product to the next cent, in all the other cases we used all the decimals for the calculations.