Find the future values of the following ordinary annuities. FV of $600 each 6 months for 8 years at a nominal rate of 16%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ FV of $300 each 3 months for 8 years at a nominal rate of 16%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ The annuities described in parts a and b have the same amount of money paid into them during the 8-year period, and both earn interest at the same nominal rate, yet the annuity in part b earns more than the one in part a over the 8 years. Why does this occur?
Find the future values of the following ordinary annuities. FV of $600 each 6 months for 8 years at a nominal rate of 16%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ FV of $300 each 3 months for 8 years at a nominal rate of 16%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ The annuities described in parts a and b have the same amount of money paid into them during the 8-year period, and both earn interest at the same nominal rate, yet the annuity in part b earns more than the one in part a over the 8 years. Why does this occur?
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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Find the
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FV of $600 each 6 months for 8 years at a nominal rate of 16%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.
$
-
FV of $300 each 3 months for 8 years at a nominal rate of 16%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.
$
-
The annuities described in parts a and b have the same amount of money paid into them during the 8-year period, and both earn interest at the same nominal rate, yet the
annuity in part b earns more than the one in part a over the 8 years. Why does this occur?
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