Find the future value accumulated in an annuity after investing periodic payments R for t years at an annual interest rate r, with payments made and interest credited k times per year.

R=$750, r=5%, t=5, k=4

Ok, with that being said, I'm confused as to how I plug this into the Future Value formula
Fv = R ((1+i)^n - 1)/i

I've gotten this:

FV = R ((1+r)^k - 1)/r

Is this correct?

Question

Find the future value accumulated in an annuity after investing periodic payments R for t years at an annual interest rate r,  with payments made and interest credited k times per year.

R=$750, r=5%, t=5, k=4

Ok, with that being said, I'm confused as to how I plug this into the Future Value formula
Fv = R ((1+i)^n - 1)/i

I've gotten this:

FV = R ((1+r)^k -  1)/r

Is this correct?

tkhunny · Answer

You have notation problems.  'r' has at least two meanings.

Annual Interest Rate = 5%

Paid and accumulated k times per year

Rate for the Formula is 5% / k

You have not told us if the deposits are at the beginning of each period or at the end of each period.