Question

1. Find the future values of the following ordinary annuities:

A. FV of $800 paid each 6 months for 5 years at a nominal rate of 12% compounded semiannually. Round your answer to the nearest cent.
$  

B. FV of $400 paid each 3 months for 5 years at a nominal rate of 12% compounded quarterly. Round your answer to the nearest cent.
$  

C. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?

2. How long will it take $100 to double if it earns the following rates? Compounding occurs once a year. Round each answer to two decimal places.

4%.

year(s)

11%.

year(s)

20%.

year(s)

100%.

year(s)

Answer 1