After carefully exmaining your budget, you determine you can manage to set aside $370 per year. you set up an annuity due of $370 annually at 6.5 % annual interest. how much will you have contributed after 22 years? what is the future value of the annuity after 22 years? how much interest will the annuity have earned?

the future value of the annuity is $17057.60

interest is $8917.60

Step-by-step explanation:

Given data

annuity = $370

rate (r) = 6.5% = 0.065

time period (t)= 22 years

to find out

the future value of the annuity and interest

solution

we know the future value of the annuity formula that is given below

future value = annuity× ( -1 / r )      ..................1

so now put all value annuity, rate , time in equation 1  to find out future value

future value = annuity× ( -1 / r )

future value = 370 × ( -1 / 0.065 )

future value =  370 × 46.101636

future value = 17057.60532

so the future value of the annuity is $17057.60

and interest = future value - annuity for 22 year

interest = 17057.60 - (22× 370)

interest = 17057.60 - (8140)

interest = 8917.60

so interest is $8917.60