a. b. C. Annuity Annual Payment Rate $ 124,000 124,000 124,000 8% 10% 12% Interest Compounded Annually Annually Annually Period Invested 6 years 6 years 6 years Present Value of Annuity

Project 1 requires an original investment of $84,200. The project will yield cash flows of $19,000 per year for seven years. Project 2 has a calculated net present value of $18,000 over a five-year life. Project 1 could be sold at the end of five years for a price of $81,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest 10% Year 6% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 0.890 0.797 0.756 0.694 0.826 0.579 0.840 0.751 0.712 0.658 0.792 0.683 0.636 0.572 0.482 0.567 0.621 0.402 0.747 0.497 0.705 0.564 0.507 0.335 0.432 0.665 0.513 0.452 0.376 0.279 0.233 8. 0.627 0.467 0.404 0.327 0.424 0.361 9. 0.592 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 10% 12% 15% 20% 1.

nnuityPayment PaymentFrequency TimePeriod (years) NominalRate (%) InterestCompounded Present Valueof the Annuity $800 every month 2 1/4 1 4 6 monthly

1) $6000 at 4% compounded semiannually for 12 years Find the future value of the ordinary annuity. Interest is compounded annually, unless otherwise indicated.

Lepp Complete present value of an ordinary annuity: Note: Round your answer to the nearest cent. Amount of Annuity Expected $ 16,000 Payment Payable Years Quarterly 2 Interest Rate earned 12% Present value

K (Compound annuity) What is the accumulated sum of each of the following streams of payments? a. $500 a year for 8 years compounded annually at 10 percent. b. $104 a year for 7 years compounded annually at 9 percent. c. $32 a year for 12 years compounded annually at 11percent. d. $21 a year for 6 years compounded annually at 6 percent.

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Amount of annuity expected $900 Payment Annually Time 4 years Interest rate 6% Present value (amount needed now to invest to receive annuity) $3,118.59 Check the correctness of annuity payment by completing the following table. Note: Round the answers the nearest cent. Opening balance ces Interest Annuity Closing balance Year 1 Year 2 Year 3 Year 4 3,118.59

Calculate future value of annuity due Annuity payment- $80 Payment frequency - every month Time period - 1 1/2 years 6% interest compounded monthly

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?