Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Related questions
Question
Use Table 12-1 to calculate the future value (in $) of the ordinary annuity . (Round your answer to the nearest cent.)
| Annuity Payment |
Payment Frequency |
Time Period (years) |
Nominal Rate (%) |
Interest Compounded |
Future Value of the Annuity |
|---|---|---|---|---|---|
| $7,500 | every 6 months | 5 | 6 | semiannually | $ |
![The table presented is for financial computations related to compound interest rates. It covers a range of interest percentages from 9% to 18%, with periods from 1 to 36.
**Table Layout:**
- **Columns:**
- The first and last columns list the periods, ranging from 1 to 36.
- The internal columns correspond to interest rates, varying from 9% to 18%.
- **Values:**
- Each cell in the middle columns provides a calculated value based on the number of periods and interest rate.
- These calculations are useful for determining the future value or cost of an investment over a specified period at a specific interest rate.
**Formula Explanation:**
The values in the table are generated with the following formula:
\[
\frac{(1 + i)^n - 1}{i(1 + i)^n}
\]
Where:
- \( i \) represents the interest rate per period.
- \( n \) represents the total number of periods.
These computations are rounded to five decimal places. This table is invaluable for educational purposes, providing a comprehensive reference for understanding the impact of compound interest over varying periods and rates.](https://content.bartleby.com/qna-images/question/d201cd7c-f0d9-4cde-8ad3-a66bd40ce2a0/4f95b9ef-e3cf-4d48-a240-e506d3e5935a/lqhcgx_processed.jpeg)
Transcribed Image Text:The table presented is for financial computations related to compound interest rates. It covers a range of interest percentages from 9% to 18%, with periods from 1 to 36.
**Table Layout:**
- **Columns:**
- The first and last columns list the periods, ranging from 1 to 36.
- The internal columns correspond to interest rates, varying from 9% to 18%.
- **Values:**
- Each cell in the middle columns provides a calculated value based on the number of periods and interest rate.
- These calculations are useful for determining the future value or cost of an investment over a specified period at a specific interest rate.
**Formula Explanation:**
The values in the table are generated with the following formula:
\[
\frac{(1 + i)^n - 1}{i(1 + i)^n}
\]
Where:
- \( i \) represents the interest rate per period.
- \( n \) represents the total number of periods.
These computations are rounded to five decimal places. This table is invaluable for educational purposes, providing a comprehensive reference for understanding the impact of compound interest over varying periods and rates.
Transcribed Image Text:**Interest Rate Table**
This table displays interest rate factors for various interest rates (1% to 8%) across periods ranging from 1 to 36. The factors were calculated using the formula \(\frac{(1+i)^n - 1}{i(1+i)^n}\) and rounded to five decimal places, where \(i\) is the interest rate per period and \(n\) is the total number of periods.
---
| Periods | 1% | 2% | 3% | 4% | 5% | 6% | 7% | 8% | Periods |
|---------|---------|---------|---------|---------|---------|---------|---------|---------|---------|
| 1 | 0.99052 | 0.99010 | 0.98922 | 0.98797 | 0.98614 | 0.95238 | 0.94340 | 0.93458 | 1 |
| 2 | 1.98510 | 1.97040 | 1.95588 | 1.94156 | 1.88609 | 1.89041 | 1.83439 | 1.80782 | 2 |
| 3 | 2.97052 | 2.94099 | 2.91320 | 2.88836 | 2.83718 | 2.67302 | 2.62432 | 2.57710 | 3 |
| 4 | 3.95050 | 3.90197 | 3.85438 | 3.81773 | 3.71010 | 3.62990 | 3.54595 | 3.46511 | 4 |
| 5 | 4.92587 | 4.85343 | 4.78264 | 4.73146 | 4.57971 | 4.45182 | 4.32948 | 4.21236 | 5 |
| 6 | 5.89828 | 5.79548 | 5.69719 | 5.63014 | 5.44719 | 5.24214 | 5.07569 | 4.91732 | 6
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- An annuity-immediate has 28 payments of $200 per period. The effective rate of interest per period is 6% for the first 12 periods and 3% for the following 16 periods. (A) Find the accumulated value of the annuity. Round your answer to 2 decimal places. (B) Find the present value of the annuity. Round your answer to 2 decimal places.arrow_forwardFind the term of the following ordinary general annuity. State your answer in years and months (from 0 to 11 months). Present Periodic Payment Interval Interest Compounding Period Value Payment Rate $10,300 $330 month 3% semi-annually The term of the annuity is year(s) and month(s).arrow_forwardLepp 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 valuearrow_forward
- An annuity-immediate has 21 payments of $800 per period. The effective rate of interest per period is 7% for the first 9 periods and 4% for the following 12 periods. (A) Find the accumulated value of the annuity. Round your answer to 2 decimal places.(B) Find the present value of the annuity. Round your answer to 2 decimal places.arrow_forwardFind the future value of the following ordinary annuity. Periodic Payment Payment Interval Term Interest Rate Conversion Period $1675 1 year 13 years 8% quarterlyarrow_forwardFind the future value of the following ordinary annuity. periodic payment $133.00 Payment Interval 1 month Term 4 years Interest Rate 10% Conversion Period semi-annually The future value is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)arrow_forward
- Present value (in $) of an annuity due Nominal Annuity Payment Time Present Value Payment Frequency Interest Period (years) Rate (%) Compounded of the Annuity $1,300 every year 5.7 annuallyarrow_forwardUse Table 12-2 to calculate the present value (in $) of the annuity due. (Round your answer to the nearest cent.) AnnuityPayment PaymentFrequency TimePeriod (years) NominalRate (%) InterestCompounded Present Valueof the Annuity $400 every month 2 1/4 6 monthly $arrow_forwardFind the term of the ordinary annuity in years and months (from 0 to 11 months). Present Value Periodic Rent Payment Interval Interest Rate Conversion Period $9,500 $1000 6 months 7.6% semi-annuallyarrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education