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Find the future values of the following ordinary annuities.


Find the future values of the following ordinary annuities. 

.1. FV of $400 each 6 months for 5 years at a nominal rate of 12%, compounded semiannually 

 2. FV of $200 each 3 months for 5 years at a nominal rate of 12%, compounded quarterly 

 3. The annuities described in parts a and b have the same total amount of money paid into them during the 5-year period, and both earn interest at the same nominal rate, yet the annuity in part b earns $101.75 more than the one in part a over the 5 years. Why does this occur?

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Answer #1

I HAVE USED. EXCEL. IF YOU WANT FORMULA, I CAN SOLVE USING FORMULA ALSO. THANK YOU

EAR = (1 +r/m)m - 1

WHERE m = NO OF COMPOUNDING IN A YEAR

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