FV-Ordinary Annuity. Various Compounding 9-15 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 semiannually b. Periods FV of $200 each three months for five years at a simple rate of 12 percent, compounded quarterly C. The annuities described in parts (a) and (b) have the same amount of money paid into them during the five-year period and both earn interest at the same simple rate, yet the annuity in part (b) earns $101.75 more than the one in part (a) over the five years. Why does this occur?
FV-Ordinary Annuity. Various Compounding 9-15 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 semiannually b. Periods FV of $200 each three months for five years at a simple rate of 12 percent, compounded quarterly C. The annuities described in parts (a) and (b) have the same amount of money paid into them during the five-year period and both earn interest at the same simple rate, yet the annuity in part (b) earns $101.75 more than the one in part (a) over the five 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
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Transcribed Image Text:FV-Ordinary Annuity.
Various Compounding
9-15 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 semiannually
b.
Periods
FV of $200 each three months for five years at a simple rate of 12 percent,
compounded quarterly
C.
The annuities described in parts (a) and (b) have the same amount of money
paid into them during the five-year period and both earn interest at the
same simple rate, yet the annuity in part (b) earns $101.75 more than the
one in part (a) over the five years. Why does this occur?
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