The future value of an annuity is a financial concept that calculates the value of a series of equal payments made at regular intervals, typically compounded over a certain period of time. The formula to calculate the future value of an annuity is:

Future Value (FV) = Payment x ((1 + Interest Rate)^n - 1) / Interest Rate

Where:
- FV is the future value of the annuity
- Payment is the amount of each payment made
- Interest Rate is the annual interest rate
- n is the number of periods


In this case, the annuity consists of Rs 5000 being paid annually for 8 years. The interest rate is 9% compounded annually.


Using the given information, we can calculate the future value of the annuity as follows:

- Payment = Rs 5000
- Interest Rate = 9% or 0.09 (decimal)
- n = 8 (8 years)

Plugging these values into the formula:

FV = Rs 5000 x ((1 + 0.09)^8 - 1) / 0.09

Simplifying the equation:

FV = Rs 5000 x (1.09^8 - 1) / 0.09

FV = Rs 5000 x (1.999 - 1) / 0.09

FV = Rs 5000 x 0.999 / 0.09

FV = Rs 55,550

Therefore, the future value of the annuity of Rs 5000 made annually for 8 years at an interest rate of 9% compounded annually is Rs 55,550.


The future value of an annuity formula calculates the total value of all the payments made over a certain period of time, taking into account the interest earned on those payments. In this case, the annuity consists of annual payments of Rs 5000 for 8 years at an interest rate of 9% compounded annually.

By plugging the given values into the formula, we can calculate the future value of the annuity to be Rs 55,550. This means that if the annuity is allowed to compound at an annual interest rate of 9%, the total value of the payments made over the 8-year period will be Rs 55,550.

This calculation is useful for individuals and businesses who want to plan for future financial goals or investments. By knowing the future value of an annuity, they can make informed decisions about how much to save or invest in order to achieve their desired financial outcomes.