FV-Ordinary Annuity.Various Compounding9-15 Find the future values of the following ordinary annuities:a.FV of $400 each six months for five years at a simple rate of 12 percent,compounded semiannuallyb.PeriodsFV of $200 each three months for five years at a simple rate of 12 percent,compounded quarterlyC.The annuities described in parts (a) and (b) have the same amount of moneypaid into them during the five-year period and both earn interest at thesame simple rate, yet the annuity in part (b) earns $101.75 more than theone in part (a) over the five years. Why does this occur?

a) Future value of ordinary annuity with compounding is calculated as below: Answer: Future value…

Answered: FV-Ordinary Annuity. Various…

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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