You have $500 in a share draft account. You earn 4% interest, compounded monthly. You have set

Question:

You have $500 in a share draft account. You earn 4% interest, compounded monthly. You have set up your account so that your annuity payment of $1,000 is deposited on the first of each month. You don’t need to use the funds at this time so have made no withdrawals. After one year, what is the share draft account’s balance?

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...