FV of $200 paid each 6 months for 5 years at a nominal rate of 15% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.$ FV of $100 paid each 3 months for 5 years at a nominal rate of 15% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.$ These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?-Select-The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a).The annuity in part (a) is compounded less frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (a) is compounded more frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (b) is compounded less frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (b) is compounded more frequently; therefore, more interest is earned on previously-earned interest.
-
FV of $200 paid each 6 months for 5 years at a nominal rate of 15% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.
$ -
FV of $100 paid each 3 months for 5 years at a nominal rate of 15% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.
$ -
These
annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet theannuity in part b ends up larger than the one in part a. Why does this occur?
-Select-The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a).The annuity in part (a) is compounded less frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (a) is compounded more frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (b) is compounded less frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (b) is compounded more frequently; therefore, more interest is earned on previously-earned interest.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
