Question

Annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exception occurs when the annuity payments come at the beginning of each period (termed an annuity due).

What is the future value of a 11-year annuity of $2,400 per period where payments come at the beginning of each period? The interest rate is 14 percent. Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods. To find the future value of an annuity due when using the Appendix tables, add 1 to n and subtract 1 from the tabular value. For example, to find the future value of a $100 payment at the beginning of each period for five periods at 10 percent, go to Appendix C for n = 6 and i = 10 percent. Look up the value of 7.716 and subtract 1 from it for an answer of 6.716 or $671.60 ($100 × 6.716).

Answer 1

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PV, FV, ANNUITY (Autosaved) Microsoft Excel (Product Activation Failed) Formulas File Home Insert Page Layout Data Review View Add-Ins Trace Precedents Show Formulas fx aDefine Name Calculate Now Trace Dependents Error Checking PUse in Formula AutoSum Recently Financial Logical Used Calculation Options a Calculate Sheet Insert Name Тext Date & Lookup & Time Reference & Trig Functions Manager Create from Selection Math More Watch Remove Arrows Evaluate Formula Window Function Formula Auditing Function Library Defined Names Calculation fix CV855 CO СР CQ CR CS СТ CU CV CW CX CY CZ 842 843 844 A = 2400 845 11 846 14% r = 847 848 ANNUITY DUE 849 FV= (A/r)*((1+r)^n -1)*(1+r) FV= (2400/0.14)*((1+0.14)^11-1)*(1+0.14) 850 FV (2400/0.14)*(3.226232298)*(1+0.14) FV 63049.7969 851 852 853 FV= 63049.80 854 855 856 857 858 859 860 LOCK BOX CAP STRU VALUE DOLLAR COST AVG ear FVApva | ШI profit margin loan with points $9 s4 EXPO s2 s3 $8 DILUTION NPER APR CPI STATE s7 130% erences WA 02:56 ENG 21-11-2019 In

BA PLUS - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins Trace Precedents Show Formulas fx Define Name Σ Calculate Now Trace Dependents Error Checking PUse in Formula Calculation Calculate Sheet Insert Function AutoSum Recently Financial Logical Text Date & Lookup & Time Reference & Trig Functions Manager Create from Selection Math More Name Watch Remove Arrows Evaluate Formula Used Window Options Formula Auditing Calculation Function Library Defined Names fox N54 W K L M O Q R S T V х Y 40 41 USING FINANCIAL CALCULATOR 42 43 ANNUITY DUE 44 SET BY PRESSING "2ND", THEN PRESS "PMT", THEN AGAIN PRESS "2ND", THEN PRESS "SET" BEG 45 46 N= 11 I/Y= 47 14 48 PV = 0 49 PMT= -2400 50 CPT FV 63049.80 51 52 53 54 55 56 57 58 59 60 Sheet4 choice 4 EAR NPV BOND PV FV Rea erences 120% WA 02:57 TENG 21-11-2019