Answer:
Future value is $1543.12
Step-by-step explanation:
From the question, present value = $200, rate = 10%, years = 6.
So that future value of ordinary annuity can be calculated by,
FV = [tex]\frac{A{[(1+r)^{n} - 1]}}{r}[/tex]
where: FV is the future value, A is the annuity, r is the rate, and n is the number of years.
FV = [tex]\frac{200[(1+0.1)^{6}-1] }{0.1}[/tex]
= [tex]\frac{200[1.1^{6}- 1] }{0.1}[/tex]
= [tex]\frac{200*0.771561}{0.1}[/tex]
= [tex]\frac{154.3122}{0.1}[/tex]
FV = $1543.122
The future value of the ordinary annuity is $1543.12.
