Compound FV/PV/rate/periods; Ordinary savings annuities: deposit, FV, duration and total interest; Tax, inflation and charges; Nominal versus effective annual rates; Drawdown/income annuities and superannuation contexts; Model assumptions and what-if comparisons
Example 1
Deposit $200 at the end of each month for 12 months at 1% interest per month. Find the balance immediately after deposit 12. Round to 2 decimal places.
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Answer: 2536.50
This is an ordinary annuity: FV=iR[(1+i)n−1].
Rounded result: 2536.50.
Example 2
Deposit $300 at the beginning of each month for 12 months at 1% per month. Find the balance at the end of month 12. Round to 2 decimal places.
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Answer: 3842.80
An annuity due gives each deposit one extra month of interest, so multiply the ordinary-annuity value by 1+i.
Rounded result: 3842.80.
Example 3
You need $2000 after 12 months at 1% monthly interest. Find the equal month-end deposit required. Round to 2 decimal places.
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Answer: 157.70
Divide the target future value by the ordinary-annuity accumulation factor.
Rounded result: 157.70.
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