To determine how much you'll have in the annuity after 5 years, we can use the formula for the future value of an ordinary annuity. The formula is:

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

Where:

• $FV$ = future value of the annuity
• $P$ = annual deposit (in this case, $2000)
• $r$ = interest rate per period (4.5% annually, or 0.045)
• $n$ = number of periods (5 years)

Let’s compute this.

$FV = 2000 \times \frac{(1 + 0.045)^5 - 1}{0.045}$

First, calculate $(1 + 0.045)^5$:

$(1 + 0.045)^5 = 1.045^5 \approx 1.2467$

Now, subtract 1 from this value:

$1.2467 - 1 = 0.2467$

Now, divide by the interest rate $r = 0.045$:

$\frac{0.2467}{0.045} \approx 5.4822$

Finally, multiply by the annual deposit of $2000:

$FV = 2000 \times 5.4822 = 10,964.40$

So, after 5 years, you will have approximately $10,964.40 in the annuity.

Would you like further details or have any questions?

---

Here are five related questions:

1. How would the amount change if you contributed $2500 annually?
2. What if the interest rate was increased to 5%?
3. How much would you have after 10 years under the same conditions?
4. How would semi-annual compounding affect the future value?
5. What is the total amount of contributions over the 5 years?

Tip: Increasing the number of periods or the interest rate increases the power of compounding.