Question

value: 10.00 points An annuity consists of end-of-month payments of $150 continuing for 6.5 years. a. Based on a nominal rate of 10% compounded quarterly, calculate the annuity's present value. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Present value b. Based on a nominal rate of 10% compounded quarterly, calculate the annuity's future value. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Future value

Answer 1

hestion : Monthly Payment= $150. years = 6.5 Rate of Reteana 10% - Part (A) To Calued to the annuity Present voleu We use formulae, a cxri-Citigan wherea Ca Periodic payment la Rate of interest na Humber of payment Son To Calveare quantenty i= 101.14 '{quanteney intenst] 122.5% H = 6.5+4 [Toter Hunter of quanter] = 26 Payment will be $150x3 5 $450. so, i H50x $141 +0.025)^ : L 0025 . : 450 t ri-0.526234 - 0.025 Ics Scanned with CamScanner

I 4 Sot F 0.4737 0.025 =45ox 18.9506]. 78627.77 (AlProx) The annuirey's present there compounded quantenty is $8527.77. Pant (6) To calweate future value of Annuity we use foranulacea furende verene = Px [C1+92)"_n re J Lehere, Pis periodic Payment ris Rate of interest His Humber of payments To calweate quarterly, His 6-51H LTo +и иси+on 2 - 26 Ris 10% 22.5% [quantenly] and, Payment will be Ovarter = Monthly Payments + 3 cs Scanned with CS Scanned with $150x3 $450 CamScanner

- 26 n = 450+ feit L 0.025 = 450* 1.9002927-17 I L O 025 / -4504 r o goo2927 L 0.025 . Hsox 36:01 70] =$16,205-2686 are of Annuity compounded gucu terly will be $16,2.05.268 Caplnox.) Scanned with CamScanner