To plan for retirement, Mary deposits $ 1373 each year in an annuity that pays 7% interest, compounded annually. Payments will be made at the end of each year. Find the total value of the annuity in 25 years.
Do not round any intermediate computations, and round your final answer to the nearest cent.

To find the total value of an annuity where Mary deposits a fixed amount each year, we use the formula for the future value of an ordinary annuity. Since payments are made at the end of each year and interest is compounded annually, the future value $FV$ of the annuity can be calculated using the following formula:

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

where:
- $P = 1373$ is the annual payment,
- $r = 0.07$ is the annual interest rate,
- $n = 25$ is the total number of payments.

Let's plug these values into the formula to calculate the future value.The total value of the annuity after 25 years, with an annual deposit of $1,373 at 7% interest compounded annually, will be **$86,840.93**.

Would you like more details on the calculation, or do you have any other questions?

### Related Questions:
1. How would the total value change if the interest rate were 8% instead of 7%?
2. What if Mary made payments at the beginning of each year instead of the end?
3. How much of the total value is due to Mary's contributions versus the interest earned?
4. What would happen if Mary increased her annual payment by $100 every year?
5. How much would Mary need to deposit each year to reach $100,000 in 25 years?

**Tip:** When planning for retirement, consider both the interest rate and the frequency of compounding to maximize returns.

To plan for retirement, Mary deposits $1373 each year in an annuity that pays 7% interest, compounded annually. Payments will be made at the end of each year. Find the total value of the annuity in 25 years. Do not round any intermediate computations, and round your final answer to the nearest cent.

Calculate the future value of an annuity where $1373 is deposited annually at 7% interest for 25 years. This problem explains how to use the future value of annuity formula, focusing on compound interest and its effect on long-term savings.

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