Solve the following by using formulas. Do not round intermediate calculations. Round your answer to the nearest cent. Ordinary Annuity

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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**Annuity Calculations for Educational Purposes**

Explore the numerical methods to accurately determine the future and present value of annuities by applying formulas. Ensure all intermediate calculations retain their precision. Final results should be rounded to the nearest cent.

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### Ordinary Annuity Calculation

**Problem Statement:**
Calculate the future value of an ordinary annuity with the details provided below:

- **Annuity Payment:** $1,500
- **Payment Frequency:** Every 3 months
- **Time Period:** 4 1/2 years (4.5 years)
- **Nominal Rate (%):** 12%
- **Interest Compounded:** Quarterly

**Calculate the Future Value of the Annuity.**
[Input box for the solution]

---

### Annuity Due Calculation

**Problem Statement:**
Calculate the future value of an annuity due with the details provided below:

- **Annuity Payment:** $3,900
- **Payment Frequency:** Every 3 months
- **Time Period:** 6 years
- **Nominal Rate (%):** 15%
- **Interest Compounded:** Quarterly

**Calculate the Future Value of the Annuity.**
[Input box for the solution]

---

### Present Value of Annuity Due Calculation

**Problem Statement:**
Determine the present value of an annuity due with the following details:

- **Annuity Payment:** $750
- **Payment Frequency:** Every 6 months
- **Time Period:** 3 years
- **Nominal Rate (%):** 8%
- **Interest Compounded:** Semiannually

**Calculate the Present Value of the Annuity.**
[Input box for the solution]

---

These calculations are essential for financial planning and investment strategies, ensuring clarity and precision in financial decision-making.
Transcribed Image Text:**Annuity Calculations for Educational Purposes** Explore the numerical methods to accurately determine the future and present value of annuities by applying formulas. Ensure all intermediate calculations retain their precision. Final results should be rounded to the nearest cent. --- ### Ordinary Annuity Calculation **Problem Statement:** Calculate the future value of an ordinary annuity with the details provided below: - **Annuity Payment:** $1,500 - **Payment Frequency:** Every 3 months - **Time Period:** 4 1/2 years (4.5 years) - **Nominal Rate (%):** 12% - **Interest Compounded:** Quarterly **Calculate the Future Value of the Annuity.** [Input box for the solution] --- ### Annuity Due Calculation **Problem Statement:** Calculate the future value of an annuity due with the details provided below: - **Annuity Payment:** $3,900 - **Payment Frequency:** Every 3 months - **Time Period:** 6 years - **Nominal Rate (%):** 15% - **Interest Compounded:** Quarterly **Calculate the Future Value of the Annuity.** [Input box for the solution] --- ### Present Value of Annuity Due Calculation **Problem Statement:** Determine the present value of an annuity due with the following details: - **Annuity Payment:** $750 - **Payment Frequency:** Every 6 months - **Time Period:** 3 years - **Nominal Rate (%):** 8% - **Interest Compounded:** Semiannually **Calculate the Present Value of the Annuity.** [Input box for the solution] --- These calculations are essential for financial planning and investment strategies, ensuring clarity and precision in financial decision-making.
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