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How do you get the future value of an ordinary annuity of 1?

Please help me. It says the future value of an ordinary annuity of 1 at 12% for four years is 4.7793. How do you compute for 4.7793?

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1. You do this by using the equation for FV of ordinary annuity. FV(A) = A * [ (1+i)^n - 1]/i Substitute n = 4, i = 0.12 and A = 1 FV(A) = 1 * [ (1+0.12)^4-1]/0.12 = 4.779328
2. An annuity is where you pay an amount each period over a number of periods In this case you are told you pay 1 each of four years The formula for the future value of the annuity is as follows FV = PMT[(1+i)^n - 1)/i FV = Future Value = 4.7793 PMT = payment each period = 1 i = period interest = .12 (interest decimal) n= number of periods = 4 FV = 1[(1 + 0.12)^4 -1) / 0.12] Fv = 4.7793 which is the answer you wanted