Answer:
The value of the annuity in 10 years will be US$ 15,552.90
Step-by-step explanation:
Let's use the ordinary simple annuity formula to calculate the value of the annuity in 10 years, this way:
FV = Future value of an annuity stream
PMT = Dollar amount of each annuity payment = US% 50
r = Interest rate = 3.5% compounded biweekly = 0.035/26
n = Number of periods in which payments will be made = 26 * 10 = 260
FV = PMT * [(1 + r)ⁿ − 1]/r
Now, replacing with the real values, we have:
FV = 50 * [(1 + 0.035/26)²⁶⁰ − 1]/(0.035/26)
FV = 50 * [(1.001346154)²⁶⁰ − 1]/0.001346154
FV = 50 * 0.41873217/0.001346154
FV = 50 * 311.058148
FV = 15,552.90
We only rounded the last product to the next cent, in all the other cases we used all the decimals for the calculations.
