G34-18 Future value of an annuity For each case in the accompanying table, answerthe questions that follow.CaseABCDEAmount of Interestannuityrate$ 2,50050030,00011,5006,0008%1220914Deposit period(years)1065830a. Calculate the future value of the annuity assuming that it is(1) an ordinary annuity.(2) an annuity due.b. Compare your findings in parts a (1) and a(2). All else being identical, whichtype of annuity-ordinary or annuity due-is preferable? Explain why.

Future value of annuity:The future value of an annuity refers to the total value of a series of…

4-18 Future value of an annuity For each case in the accompanying table, answer the questions that follow. Case ABCDE Amount of Interest annuity rate $ 2,500 500 30,000 11,500 6,000 8% 12 20 9 14 Deposit period (years) 10 6 S 8 30

4-18 Future value of an annuity For each case in the accompanying table, answer the questions that follow. Case ABCDE Amount of Interest annuity rate $ 2,500 500 30,000 11,500 6,000 8% 12 20 9 14 Deposit period (years) 10 6 S 8 30

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Amount of annuity expected $900 Payment Annually Time 4 years Interest rate 6% Present value (amount needed now to invest to receive annuity) $3,118.59 Check the correctness of annuity payment by completing the following table. Note: Round the answers the nearest cent. Opening balance ces Interest Annuity Closing balance Year 1 Year 2 Year 3 Year 4 3,118.59
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EACTIVITY # 1 Find the future value and present value using the ordinary annuity and. No. Principal Rate Mode of Payment Term 3 years 5 years 10 years 12 years 2% P40,000 P100,000 P340,000 P1,240,000 Annually Quarterly Monthly Semiannually 4% 6% 9% 1234

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