FUTURE VALUE FOR VARIOUS COMPOUNDING PERIODS Find the amount to which $500 will grow under each of these conditions:
a. 12% compounded annually for 5 years
b. 12% compounded semiannually for 5 years
c. 12% compounded quarterly for 5 years
d. 12% compounded monthly for 5 years
e. 12% compounded daily for 5 years
f. Why does the observed pattern of FVs occur?
Future value=present value*(1+rate/m)^(m*number of years)
where m is compounding periods per year
1.
=500*(1+12%/1)^(1*5)=881.1708416
2.
=500*(1+12%/2)^(2*5)=895.4238483
3.
=500*(1+12%/4)^(4*5)=903.0556173
4.
=500*(1+12%/12)^(12*5)=908.3483493
5.
=500*(1+12%/365)^(365*5)=910.9695664
6.
Because future value is directly proportional to compounding
frequency
FUTURE VALUE FOR VARIOUS COMPOUNDING PERIODS Find the amount to which $500 will grow under each of these conditions:
Future Value for Various Compounding Periods Find the amount to which $550 will grow under each of the following conditions. Do not round intermediate calculations. Round your answer to the nearest cent. 5% compounded annually for 5 years $ 5% compounded semiannually for 5 years $ 5% compounded quarterly for 5 years $ 5% compounded monthly for 5 years $
Find the amount to which $800 will grow under each of these conditions: 4% compounded annually for 5 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ 4% compounded semiannually for 5 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ 4% compounded quarterly for 5 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ 4% compounded monthly for 5 years. Do not round intermediate...
Click here to read the eBook: Future Values Click here to read the eBook: Semiannual and Other Compounding Periods FUTURE VALUE FOR VARIOUS COMPOUNDING PERIODS Find the amount to which $600 will grow under each of these conditions: a. 9% compounded annually for 5 years. Do not round intermediate calculations. Round your answer to the nearest cent. b. 9% compounded semiannually for 5 years. Do not round intermediate calculations. Round your answer to the nearest cent. c. 9% compounded quarterly...
Find the amount to which $500 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent. 6% compounded annually for 5 years. $ 6% compounded semiannually for 5 years. $ 6% compounded quarterly for 5 years. $ 6% compounded monthly for 5 years.
Present Value for Various Compounding Periods Find the present value of $500 due in the future under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent. 4% nominal rate, semiannual compounding, discounted back 5 years $ 4% nominal rate, quarterly compounding, discounted back 5 years $ 4% nominal rate, monthly compounding, discounted back 1 year $
Future Value of an Annuity for Various Compounding Periods Find the future values of the following ordinary annuities: FV of $200 paid each 6 months for 9 years at a nominal rate of 12%, compounded semiannually. Round your answer to the nearest cent. $ FV of $100 paid each 3 months for 9 years at a nominal rate of 12%, compounded quarterly. Round your answer to the nearest cent. $
Future Value of an Annuity for Various Compounding Periods Find the future values of the following ordinary annuities: FV of $800 paid each 6 months for 7 years at a nominal rate of 12%, compounded semiannually. Round your answer to the nearest cent. $ FV of $400 paid each 3 months for 7 years at a nominal rate of 12%, compounded quarterly. Round your answer to the nearest cent. $
Present Value for Various Compounding Periods Find the present value of $400 due in the future under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent. 4% nominal rate, semiannual compounding, discounted back 5 years $ _______ 4% nominal rate, quarterly compounding, discounted back 5 years $________ 4% nominal rate, monthly compounding, discounted back 1 year $________
Present Value for Various Compounding Periods Find the present value of $675 due in the future under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent. a. 6% nominal rate, semiannual compounding, discounted back 5 years. $ 504.40 b. 6% nominal rate, quarterly compounding, discounted back 5 years. $ c. 6% nominal rate, monthly compounding, discounted back 1 year.
8. Problem 5.15 (Present Value of an Annuity) eBook Find the present values of these ordinary annuities. Discounting occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent. a. $200 per year for 16 years at 6%. b. $100 per year for 8 years at 3%. C. $200 per year for 8 years at 0%. d. Rework previous parts assuming they are annuities due. Present value of $200 per year for 16 years at...