Annuity Fund Growth: $50,000 Contribution at 4.5% Interest Over 20 Years

Math Problem Statement

The Cooper Foundation contributes $50,000 per year into an annuity fund for building a new zoo. The fund earns 4.5% interest. Find the amount in the fund at the end of 20 years. (Round your final answer to two decimal places.)

Solution

To solve this problem, we need to use the formula for the future value of an annuity. The formula is:

$FV = P \times \frac{(1 + r)^n - 1}{r}$

Where:

$FV$ is the future value of the annuity (amount in the fund after 20 years),

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Math Problem Analysis

Mathematical Concepts

Annuity
Compound Interest
Future Value

Formulas

Future Value of Annuity Formula: FV = P * [(1 + r)^n - 1] / r

Theorems

Compound Interest Principle

Suitable Grade Level

Grades 11-12

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