Calculate future value of annuity due Annuity payment- $80 Payment frequency - every month Time period - 1 1/2 years 6% interest compounded monthly
Calculate future value of annuity due Annuity payment- $80 Payment frequency - every month Time period - 1 1/2 years 6% interest compounded monthly
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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Question
Calculate future value of annuity due
Annuity payment- $80
Payment frequency - every month
Time period - 1 1/2 years
6% interest compounded monthly
Expert Solution
Step 1: Introduction
Future value of Annuity due:
An annuity due involves payments at the beginning, resulting in a higher future value due to an extra period of compounding. Calculating the Future Value of an Annuity Due helps individuals or businesses understand the growth potential of their investments or obligations with a time advantage. It considers the time value of money.
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