Find the future values of the following ordinary annuitiesa. FV of $800 paid each 6 months for 5 years at a nominal rate of 16% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest centb. PV of $400 paid each 3 months for 5 years at a nominal rate of 16% compounded quarterly. Do not round intermediate calculations. Round yThese annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the anity in pThe annuity in part (8) is compounded less frequently therefore, mare interest is earned in prestly and intereHide FeedbackIncorrecta. Why does this use?Check My Work (m

The future value of an annuity refers to the accumulated value of its cash flows assuming they are…

Answered: aFV of $800 paid each 6 months for bFV…

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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Find the future values of the following ordinary annuities: FV of $300 paid each 6 months for 5 years at a nominal rate of 12% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $   FV of $150 paid each 3 months for 5 years at a nominal rate of 12% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $   These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?
Find the future values of the following ordinary annuities. FV of $600 each 6 months for 4 years at a nominal rate of 8%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $   FV of $300 each 3 months for 4 years at a nominal rate of 8%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $   The annuities described in parts a and b have the same amount of money paid into them during the 4-year period, and both earn interest at the same nominal rate, yet the annuity in part b earns more than the one in part a over the 4 years. Why does this occur
Find the future values of the following ordinary annuities: FV of $400 paid each 6 months for 5 years at a nominal rate of 4% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.$   FV of $200 paid each 3 months for 5 years at a nominal rate of 4% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.$
Find the future values of the following ordinary annuities: a. FV of $500 paid each 6 months for 5 years at a nominal rate of 6% compounded semiannually. Do not round Intermediate calculations. Round your answer to the nearest cent. $ b. FV of $250 paid each 3 months for 5 years at a nominal rate of 6% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur? -Select-
Find the future values of the following ordinary annuities: a. FV of $600 paid each 6 months for 5 years at a nominal rate of 6% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ b. FV of $300 paid each 3 months for 5 years at a nominal rate of 6% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur? 819000.0 The annuity in part (b) is compounded more frequently, therefore, more interest is earned on previously-earned interest. V
Find the future values of the following ordinary annuities: a. FV of $300 paid each 6 months for 5 years at a nominal rate of 15% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ b. FV of $150 paid each 3 months for 5 years at a nominal rate of 15% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a, Why does this occur? ✓-Select- The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a). The annuity in part (a) is compounded less frequently, therefore, more interest is earned on previously-earned interest. The annuity in part (a) is compounded more frequently, therefore, more interest is earned on previously-earned interest. The annuity in…
Find the future values of the ordinary annuities at the given annual rate r compounded as indicated. The payments are made to coincide with the periods of compounding. (Round your answer to the nearest cent.) PMT = $200, r = 2.7%, compounded semiannually for 25 years
FV of $200 paid each 6 months for 5 years at a nominal rate of 15% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.$ FV of $100 paid each 3 months for 5 years at a nominal rate of 15% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.$ These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?-Select-The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a).The annuity in part (a) is compounded less frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (a) is compounded more frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (b) is compounded less frequently; therefore, more interest is…
uture Value of an Annuity for Various Compounding Periods Find the future values of the following ordinary annuities. FV of $600 each 6 months for 5 years at a nominal rate of 16%, compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent. $ FV of $300 each 3 months for 5 years at a nominal rate of 16%, compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent. $ The annuities described in parts a and b have the same amount of money paid into them during the 5-year period, and both earn interest at the same nominal rate, yet the annuity in part b earns more than the one in part a over the 5 years. Why does this occur? -Select-The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a).The annuity in part (a) is compounded less frequently; therefore, more interest is earned on interest.The annuity in part (a) is compounded more…
Find the present value of $700 due in the future under each of these conditions: a. 6% nominal rate, semiannual compounding, discounted back 8 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ b. 6% nominal rate, quarterly compounding, discounted back 8 years. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. 6% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent. S d. Why do the differences in the PV's occur?
Find the present value of $400 due in the future under each of these conditions: a. 6% nominal rate, semiannual compounding, discounted back 9 years. Do not round intermediate calculations. Round your answer to the nearest cent. 2$ b. 6% nominal rate, quarterly compounding, discounted back 9 years. Do not round intermediate calculations. Round your answer to the nearest cent. c. 6% nominal rate, monthly compounding, discounted back 1 year. Do not round intermediate calculations. Round your answer to the nearest cent. %24 %24
5.11 Find the future values of the following ordinary annuities: FV of $800 paid each 6 months for 5 years at a nominal rate of 4% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.$ FV of $400 paid each 3 months for 5 years at a nominal rate of 4% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.$ These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?-Select-The nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a).The annuity in part (a) is compounded less frequently; therefore, more interest is earned on previously-earned interest.The annuity in part (a) is compounded more frequently; therefore, more interest is earned on previously-earned interest.The annuity in…

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