The future value of 20 periodic payments of $5,460 each, made at the beginning of each period and compounded at 8%, is $269,849.15.
What is future value?
The future value of periodic payments is the compounded value for a future period at an interest rate.
The formula for computing the future value of periodic payments is:
FV=PV(1+r)^{n}
Where:
FV = future value
PV = present value
r = annual interest rate
{n} = number of periods interest held
We can use compute the future value of periodic payments using an online finance calculator as follows:
Data and Calculations:
N (# of periods) = 20 years
I/Y (Interest per year) = 8 years
PV (Present Value) = $0
PMT (Periodic Payment) = $5,460
Results:
Future Value = $269,849.15 ($109,200 + $160,649.15)
Sum of all periodic payments = $109,200 ($5,460 x 20)
Total Interest = $160,649.15
Thus, the future value of 20 periodic payments of $5,460 each, made at the beginning of each period and compounded at 8%, is $269,849.15.
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