Explanation Given: The periodic payment is R = 100 , the interest rate is i = 0.06 , and the number of periods is n = 4 . Formula used: Future value of an ordinary annuity is S = R [ ( 1 + i ) n − 1 i ] . Where, S is the future value; R is the periodic payment; i is the interest rate per period; n is the number of periods. Calculation: Given that, the periodic payment is R = 100 . The interest is compounded annually. It is given that the number of periods is n = 4 and the interest rate is i = 0.06 . Use the above mentioned formula to obtain the future value of the ordinary annuity. Substitute R = 100 , i = 0

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Chapter 5.2, Problem 17E

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To find: The future value of the ordinary annuity.

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Chapter 5.2, Problem 16E

Chapter 5.2, Problem 18E

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The future value of the ordinary annuity.

Solution Summary: The author explains the formula used to determine the future value of an ordinary annuity.

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Chapter 5 Solutions