Explanation Given Information: Annuity payment is $ 500 , the frequency of payment is 6 months, the time duration is 5 years, the nominal rate of return is 3 % and interest is compounded semiannually. Formula used: The formula for future value of the ordinary annuity is, F V = P m t × ( 1 + i ) n − 1 i Here, FV is the future value, Pmt is the Annuity payment, i is the interest rate per period (nominal rate ÷ periods per year) and n is the number of periods (years × periods per year). Calculation: Consider that the annuity payment is $ 500 , the frequency of payment is 6 months, the time duration is 5 years, the nominal rate of return is 3 % and interest is compounded semiannually. The rate period is 1.5 % ( 3 % ÷ 2 period per year ) . The number of periods is 10 ( 5 years × 2 period per year ) . Substitute 10 for a number of periods, 0

Contemporary Mathematics for Business and Consumers

7th Edition

ISBN: 9781285189758

Author: Robert Brechner, George Bergeman

Publisher: Cengage Learning

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Chapter 12, Problem 23AT

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To calculate: The future value of annuities due where annuity payment is $500, the frequency of payment is 6 months, the time duration is 5 years, the nominal rate of return is 3% and interest is compounded semiannually.

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Chapter 12, Problem 22AT

Chapter 12, Problem 24AT

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Chapter 12 Solutions

Contemporary Mathematics for Business and Consumers

Ch. 12.I - Freeport Bank is paying 8% interest compounded...Ch. 12.I - Vista Savings Loan is paying 6% interest...Ch. 12.I - Katrina Byrd invested $250 at the end of every...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...Ch. 12.I - Use Table 12-1 to calculate the future value of...

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The future value of annuities due where annuity payment is $ 500 , the frequency of payment is 6 months, the time duration is 5 years, the nominal rate of return is 3 % and interest is compounded semiannually.

Solution Summary: The author calculates the future value of an annuity due where the frequency of payment is 6 months and the nominal rate of return are 3%.

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To calculate: The future value of annuities due where annuity payment is $500, the frequency of payment is 6 months, the time duration is 5 years, the nominal rate of return is 3% and interest is compounded semiannually.

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Chapter 12 Solutions