Question

Brief Exercise G-2 For each of the following cases, indicate (a) what interest rate columns and (b) what number of periods you would refer to in looking up the future value factor. (1) In Table 1 (future value of 1): Number of Annual Rate Years Invested Compounded Annually Semiannually Case A 5% 5 12 % Case B (a) (b) Case A % periods Case B % periods (2) In Table 2 (future value of an annuity of 1): Number of Annual Rate Years Invested Compounded Annually Semiannually Case A Case B 4% 8% (b) Case A % periods Case B % periods

Answer 1

Ansesey Page No 0 * In table (folüme value of D): Case A - Annually Case B - Semiannually Annual mate = 10.7. = 64, Alooof years invested - 5x2 = 10 periods ** 1 Annual rate NICO No of years invested Case A 6 periods 10 periods Case B 6% @ Cars A - In table & ( future value of an annuily of 1) :- Cars A - Annually 1. Case B - Semi annually Annual orate = $ = 4%) No. of years invested a 4x2 = 8 periods Case A 4% 9 periods 8 periods case B