Use Table 12-1 to calculate the future value (in $) of the ordinary annuity. (Round your answer to the nearest cent.) Annuity Payment Payment Frequency Time Period (years) Nominal Rate (%) Interest Compounded Future Value of the Annuity $7,500 every 6 months 5 6 semiannually $
Use Table 12-1 to calculate the future value (in $) of the ordinary annuity. (Round your answer to the nearest cent.) Annuity Payment Payment Frequency Time Period (years) Nominal Rate (%) Interest Compounded Future Value of the Annuity $7,500 every 6 months 5 6 semiannually $
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
Related questions
Question
Use Table 12-1 to calculate the future value (in $) of the ordinary annuity . (Round your answer to the nearest cent.)
| Annuity Payment |
Payment Frequency |
Time Period (years) |
Nominal Rate (%) |
Interest Compounded |
Future Value of the Annuity |
|---|---|---|---|---|---|
| $7,500 | every 6 months | 5 | 6 | semiannually | $ |
![The table presented is for financial computations related to compound interest rates. It covers a range of interest percentages from 9% to 18%, with periods from 1 to 36.
**Table Layout:**
- **Columns:**
- The first and last columns list the periods, ranging from 1 to 36.
- The internal columns correspond to interest rates, varying from 9% to 18%.
- **Values:**
- Each cell in the middle columns provides a calculated value based on the number of periods and interest rate.
- These calculations are useful for determining the future value or cost of an investment over a specified period at a specific interest rate.
**Formula Explanation:**
The values in the table are generated with the following formula:
\[
\frac{(1 + i)^n - 1}{i(1 + i)^n}
\]
Where:
- \( i \) represents the interest rate per period.
- \( n \) represents the total number of periods.
These computations are rounded to five decimal places. This table is invaluable for educational purposes, providing a comprehensive reference for understanding the impact of compound interest over varying periods and rates.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd201cd7c-f0d9-4cde-8ad3-a66bd40ce2a0%2F4f95b9ef-e3cf-4d48-a240-e506d3e5935a%2Flqhcgx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The table presented is for financial computations related to compound interest rates. It covers a range of interest percentages from 9% to 18%, with periods from 1 to 36.
**Table Layout:**
- **Columns:**
- The first and last columns list the periods, ranging from 1 to 36.
- The internal columns correspond to interest rates, varying from 9% to 18%.
- **Values:**
- Each cell in the middle columns provides a calculated value based on the number of periods and interest rate.
- These calculations are useful for determining the future value or cost of an investment over a specified period at a specific interest rate.
**Formula Explanation:**
The values in the table are generated with the following formula:
\[
\frac{(1 + i)^n - 1}{i(1 + i)^n}
\]
Where:
- \( i \) represents the interest rate per period.
- \( n \) represents the total number of periods.
These computations are rounded to five decimal places. This table is invaluable for educational purposes, providing a comprehensive reference for understanding the impact of compound interest over varying periods and rates.
Transcribed Image Text:**Interest Rate Table**
This table displays interest rate factors for various interest rates (1% to 8%) across periods ranging from 1 to 36. The factors were calculated using the formula \(\frac{(1+i)^n - 1}{i(1+i)^n}\) and rounded to five decimal places, where \(i\) is the interest rate per period and \(n\) is the total number of periods.
---
| Periods | 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% | Periods |
|---------|---------|---------|---------|---------|---------|---------|---------|---------|---------|
| 1 | 0.99052 | 0.99010 | 0.98922 | 0.98797 | 0.98614 | 0.95238 | 0.94340 | 0.93458 | 1 |
| 2 | 1.98510 | 1.97040 | 1.95588 | 1.94156 | 1.88609 | 1.89041 | 1.83439 | 1.80782 | 2 |
| 3 | 2.97052 | 2.94099 | 2.91320 | 2.88836 | 2.83718 | 2.67302 | 2.62432 | 2.57710 | 3 |
| 4 | 3.95050 | 3.90197 | 3.85438 | 3.81773 | 3.71010 | 3.62990 | 3.54595 | 3.46511 | 4 |
| 5 | 4.92587 | 4.85343 | 4.78264 | 4.73146 | 4.57971 | 4.45182 | 4.32948 | 4.21236 | 5 |
| 6 | 5.89828 | 5.79548 | 5.69719 | 5.63014 | 5.44719 | 5.24214 | 5.07569 | 4.91732 | 6
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education