Calculating Future Value of an Annuity

Maria intends to invest in a series of cash flows for her retirement. She plans to contribute a fixed amount of money every year for the next 20 years. This series of cash flows is an example of an annuity. If she contributes $5,000 annually and the interest rate is 6% compounded annually, how much will she have accumulated at the end of 20 years?

To calculate the future value of an annuity, we can use the formula:

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

Where:

- $$ FV $$ is the future value of the annuity

- $$ P $$ is the annual payment

- $$ r $$ is the annual interest rate

- $$ n $$ is the number of payments