Find the future value of the ordinary annuity. Interest is compounded annually.
Requals1000​;   iequals0.05​;   nequals25
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Part 1
The future value of the ordinary annuity is ​$
  
enter your response here.

To calculate the future value (FV) of an ordinary annuity, we use the formula:

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

where:
- $ P $ is the payment per period (in this case, $ P = 1000 $),
- $ i $ is the interest rate per period (in this case, $ i = 0.05 $),
- $ n $ is the number of periods (in this case, $ n = 25 $).

Let’s calculate it step by step.

\[
FV = 1000 \times \frac{(1 + 0.05)^{25} - 1}{0.05}
\]

Now, I'll compute the value.

The future value of the ordinary annuity is approximately **$47,727.10**.

Would you like more details or explanations? Here are five related questions to further explore the concept:

1. What is the difference between an ordinary annuity and an annuity due?
2. How would the future value change if interest were compounded monthly instead of annually?
3. What would the future value be if the interest rate were increased to 6%?
4. How is the present value of an annuity different from the future value?
5. What would happen if the number of periods increased to 30 years?

**Tip:** For longer periods or higher interest rates, the future value grows significantly due to the power of compound interest.

Find the future value of the ordinary annuity. Interest is compounded annually. Requals1000​;   iequals0.05​;   nequals25. The future value of the ordinary annuity is ​$ ______.

Learn how to calculate the future value of an ordinary annuity with annual payments of $1000, compounded at 5% interest over 25 years. This financial math problem involves key concepts of annuities and compound interest, ideal for students in Grades 10-12.

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