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 11% 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 11% 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?
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 11% 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 11% 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?
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
a. FV of $500 paid each 6 months for 5 years at a nominal rate of 11% 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 11% 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
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