annuity

[kpgould@a0l.com offline]

If I receive an annual payment of $ 800.00 and it is invested at 5% compounded annually how much money will I have in 23 years

[Doctor Who? offline]

There are two ways to do this.

You can either add 5% of 800 (use cross-multiplication to do this) to 800, then multiply by 23, or multiply 800 by 23, then add 5% of that to the answer.

Method 1:

*(5/100) x (x/800)
*5 x 800 / 100 = 40
*800 + 40
*840 x 23 = 19320

Method 2:

*800 x 23
*18400
*(5/100) x (x/18400)
*5 x 18400 / 100 = 920

Answer = 920