(a) Ordinary annuity, payments are made at end of each period
FV = P(1+r)n-1 +....+ P(1+r)2 + P(1+r) + P = P[(1+r)n -1]/r
where, Annual Payment = P = $300
Interest Rate = r = 8% = 0.08
Number of Years = n = 5
=> FV = 300(1.085 - 1] /0.08 = $1759.98
(b) Annuity due, payments are made at starting of each period
FV = P(1+r)n +....+ P(1+r)2 + P(1+r) = P [((1 + r)n - 1) / r])(1 + r)
where, Annual Payment = P = $300
Interest Rate = r = 8% = 0.08
Number of Years = n = 5
=> FV = 300((1.08)5 - 1) / 0.08)(1.08) = $1900.78
6. Problem 5.06 Click here to read the eBook: Future Value of an Ordinary Annuity Click...
Problem 4-6 Future Value: Ordinary Annuity versus Annuity Due What is the future value of a 8%, 5-year ordinary annuity that pays $650 each year? Round your answer to the nearest cent. $ If this were an annuity due, what would its future value be? Round your answer to the nearest cent. $
8. Problem 5.19 Click here to read the eBook: Future Value of an Ordinary Annuity Click here to read the eBook: Finding Annuity Payments, Periods, and Interest Rates Problem Walk-Through FUTURE VALUE OF AN ANNUITY Your client is 33 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $2,000 per year, and you advise her to invest it in the stock market, which you expect to provide...
Problem 4-6 Future Value: Ordinary Annuity versus Annuity Due What is the future value of a 4%, 5-year ordinary annuity that pays $600 each year? Round your answer to the nearest cent. $ If this were an annuity due, what would its future value be? Round your answer to the nearest cent. $
Future value: annuity versus annuity dueWhat's the future value of a 9%, 5-year ordinary annuity that pays $300 each year? Round your answer to the nearest cent.$ If this was an annuity due, what would its future value be? Round your answer to the nearest cent.$
eBook What's the future value of a 9%, 5-year ordinary annuity that pays $100 each year? If this was an annuity due, what would its future value be? Do not round intermediate calculations. Round your answers to the nearest cent. Future Value of an ordinary Annuity: $ Future Value of an Annuity Due: $
Future Value: Ordinary Annuity versus Annuity Due What is the future value of a 4%, 5-year ordinary annuity that pays $600 each year? Round your answer to the nearest cent. $ If this were an annuity due, what would its future value be? Round your answer to the nearest cent. $
Future Value: Ordinary Annuity versus Annuity Due 1.What is the future value of a 10%, 5-year ordinary annuity that pays $800 each year? Round your answer to the nearest cent. 2. If this were an annuity due, what would its future value be? Round your answer to the nearest cent.
7. Problem 5.07 Click here to read the eBook: Future Values Click here to read the eBook: Present Values Problem Walk-Through PRESENT AND FUTURE VALUES OF A CASH FLOW STREAM An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $350 at the end of Year 5, and $550 at the end of Year 6. a. If other investments of equal risk earn 7% annually, what is its...
12. Problem 5.36 Click here to read the eBook: Future Values Click here to read the eBook: Present Values Click here to read the eBook: Semiannual and Other Compounding Periods NONANNUAL COMPOUNDING a. You plan to make five deposits of $1,000 each, one every 6 months, with the first payment being made in 6 months. You will then make no more deposits. If the bank pays 8% nominal interest, compounded semiannually, how much will be in your account after 3...
1. What's the future value of a 10%, 5-year ordinary annuity that pays $200 each year? Round your answer to the nearest cent. 2. If this was an annuity due, what would its future value be? Round your answer to the nearest cent.