Given parameters
rate =4.75%
time= 5years
Annuity due refers to a series of equal payments made at the same interval at the beginning of each period. Periods can be monthly, quarterly, semi-annually, annually, or any other defined period.
The formula to be used will be
[tex]FV=P\times\frac{(1+r)^n-1}{r}\times(1+r)[/tex]From the question given
[tex]\begin{gathered} P=900 \\ n=4\times5=20 \\ r=\frac{4.75}{4}=1.1875\text{ \%}=0.011875 \end{gathered}[/tex]Part A
[tex]900\times\frac{(1+0.011875)^{20}}{0.011875}\times(1+0.011875)[/tex]=> $97112.04
Part B
n=4x10 =40 (Because it is compounded 4 times a year and then for 10 years)
[tex]450\times\frac{(1+0.011875)^{40}}{0.011875}\times(1.011875)[/tex]=>$61486.59
