Calculate the value of the annuity due without a table. Note: Do not round intermediate calculations. Round your answer to the nearest cent. LA $ Amount of payment 3,500 Payment payable Annually Years 3 Interest Value of annuity due rate 6 %
Calculate the value of the annuity due without a table. Note: Do not round intermediate calculations. Round your answer to the nearest cent. LA $ Amount of payment 3,500 Payment payable Annually Years 3 Interest Value of annuity due rate 6 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![**Calculating the Value of an Annuity Due**
When calculating the value of an annuity due without a table, it's important to consider the specifics of the payment schedule, the number of years, and the interest rate.
**Instruction:**
Calculate the value of the annuity due without using a table.
**Note:** Do not round intermediate calculations. Round your final answer to the nearest cent.
**Parameters:**
| Amount of Payment | Payment Payable | Years | Interest Rate | Value of Annuity Due |
|-------------------|-----------------|-------|---------------|----------------------|
| $3,500 | Annually | 3 | 6% | [Calculate] |
To solve this problem, apply the annuity due formula, which accounts for payments occurring at the beginning of each period. This requires adjusting the ordinary annuity formula to reflect the change in timing.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa1e1d114-cba9-4c4f-a9ab-1a346fb28105%2F210b29ee-6b5a-4557-9aac-e3e7be1ac54c%2Fgqtcbnm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Calculating the Value of an Annuity Due**
When calculating the value of an annuity due without a table, it's important to consider the specifics of the payment schedule, the number of years, and the interest rate.
**Instruction:**
Calculate the value of the annuity due without using a table.
**Note:** Do not round intermediate calculations. Round your final answer to the nearest cent.
**Parameters:**
| Amount of Payment | Payment Payable | Years | Interest Rate | Value of Annuity Due |
|-------------------|-----------------|-------|---------------|----------------------|
| $3,500 | Annually | 3 | 6% | [Calculate] |
To solve this problem, apply the annuity due formula, which accounts for payments occurring at the beginning of each period. This requires adjusting the ordinary annuity formula to reflect the change in timing.
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