PART 2 Financial ToolsP5-19 Future value of an annuity For each case in the accompanying table, answer thequestions that follow.CaseBEmenyAmount of annuity$ 2,50030.00011,5006,000Interest rate*%*23^21214Deposit period (yearsa. 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 all) and a(2). All else being identical, which typeof annuity-- ordinary or annuity due—is preferable? Explain why,

Future value The value that an investment will have at a certain time in the future is known as the future value of an investment. Future value helps to understand the return that an investment will generate in the future, which helps in making investment decisions easily. a. The below excel table shows the calculation of the following b. The future value indicates the return that an investment will accumulate after a certain period in the future. The future value of the annuity due is preferable because in this case, the future value is more compared to the ordinary annuity. A higher return is always preferable by the investor even if the risk is more.

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Case Amount of annuity $1,500 500 30,000 11,500 AUDH B Interest rate 8% ga 14 Deposit period (years) 10 a. 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 all) and a(2). All else being identical, which type of annuity--ordinary or annuity due-is preferable? Explain why,

Case Amount of annuity $1,500 500 30,000 11,500 AUDH B Interest rate 8% ga 14 Deposit period (years) 10 a. 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 all) and a(2). All else being identical, which type of annuity--ordinary or annuity due-is preferable? Explain why,

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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Lepp Complete present value of an ordinary annuity: Note: Round your answer to the nearest cent. Amount of Annuity Expected $ 16,000 Payment Payable Years Quarterly 2 Interest Rate earned 12% Present value
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
Question 7 of 10 > Every year you deposit $3,400 into an account that earns 2% interest per year. What will be the balance of your account immediately after the 20th deposit? Click the icon to view the interest and annuity table for discrete compounding when i = 2% per year. Choose the correct answer below O A. $79,464 O B. $68,000 OC. $82,611 OD. $51,438 O E $84,263
Find the value of the annuity and the interest. nt P[(1 +n' -1] A = A = P =- nt Periodic Deposit: $2500 at the end of every three months Rate: 4.5% compounded quarterly Time: 9 years O A. $79,006; $10,994 O B. $110,204; $20,204 O C. $332,426; $242,426 O D. $106,505; $16,505
Individual Assessment 1.a: Simple Ordinary Annuity Directions: Calculate the future value of #1, 2, & 3 and present value of #4 & 5. Mode of Payment Annually Monthly Quarterly Length of Annuity 3 years 5 years 4 years Length of Annuity 10 years 2 years Principal Interest Future Rate Value 1. P20,000 2% 2. P1,500 7% 3. P4,300 3.50% Principal Interest Mode of Present Rate Payment Value Semi-annually Bimonthly 4. P5,000 3.20% 5. P3,800 6%
Can you help with question 3 please?
list 12 K Find the present value of the following ordinary annuity. Periodic Payment Payment Interval Term Interest Rate Conversion Period $156.00 1 month 5 years 5% semi-annually 3 4 The present value is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 5 6
None
Present value of an ordinary annuity. Fill in the missing present values in the following table for an ordinary annuity:
Question 4 What's the present value of a $830 annuity payment over six years if interest rates are 10 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.) Futre value
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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