Annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exceptionoccurs when the annuity payments come at the beginning of each period (termed an annuity due).What is the future value of a 15-year annuity of $1,700 per period where payments come at the beginning of each period? The interestrate is 11 percent. Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculatormethods. To find the future value of an annuity due when using the Appendix tables, add 1 to n and subtract 1 from the tabular value.For example, to find the future value of a $100 payment at the beginning of each period for five periods at 10 percent, go to AppendixC for n= 6 and /= 10 percent. Look up the value of 7.716 and subtract 1 from it for an answer of 6.716 or $671.60 ($100 * 6.716)Note: Do not round intermediate calculations. Round your final answer to 2 decimal places.Future value

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What is the future value of a 15-year annuity of $1,700 per period where payments come at the beginning of each period? formula and financi

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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Question

Annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exception
occurs when the annuity payments come at the beginning of each period (termed an annuity due).
What is the future value of a 15-year annuity of $1,700 per period where payments come at the beginning of each period? The interest
rate is 11 percent. Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator
methods. To find the future value of an annuity due when using the Appendix tables, add 1 to n and subtract 1 from the tabular value.
For example, to find the future value of a $100 payment at the beginning of each period for five periods at 10 percent, go to Appendix
C for n= 6 and /= 10 percent. Look up the value of 7.716 and subtract 1 from it for an answer of 6.716 or $671.60 ($100 * 6.716)
Note: Do not round intermediate calculations. Round your final answer to 2 decimal places.
Future value

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