Calculate the future value of an annuity, with case A being an ordinary annuity and case B being an annuity due. Deposit Period (Yrs) Value ($) Interest Future Case Rate (%) Annuity 13,000 3,000 A 3 8 12
Calculate the future value of an annuity, with case A being an ordinary annuity and case B being an annuity due. Deposit Period (Yrs) Value ($) Interest Future Case Rate (%) Annuity 13,000 3,000 A 3 8 12
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
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Transcribed Image Text:Calculate the future value of an annuity, with case A being an ordinary annuity and case B being an annuity due.
Interest
Deposit
Period (Yrs)
Future
Case
Rate (%)
Value ($)
Annuity
13,000
3,000
A
3
8
8
12
Expert Solution
Step 1
Annuities -
Annuities are the agreements and contracts that promise periodic and regular payments or series of cash flows either in the present immediately or in the future period. These are considered insurance contracts that pay a regular and fixed payment of funds on a specified period of time.
There are ordinary annuities and annuities due. An ordinary annuity is the annuity that pays regular payments in equal amounts and an annuity due is an annuity that pays immediately at the end of specified periods of time.
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