Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Textbook Question
Chapter 7, Problem 7.1E
Ordinary Annuity, Annuity Due, Using Interest Tables. Indicate which rate and time period you would use in order to select the correct interest factor for the following situations. In addition, indicate the interest factor that would be used.
- a. Using PV of an Ordinary Annuity of $1 Table 7A.5:
| Annual Rate | Time Period | Compounded Interest |
| 4% | 10 | Annually |
| 8% | 8 | Semiannually |
| 12% | 5 | Quarterly |
- b. Using FV of an Annuity Due of $1 Table 7A.4:
| Annual Rate | Time Period | Compounded Interest |
| 3% | 7 | Annually |
| 10% | 9 | Semiannually |
| 16% | 4 | Quarterly |
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For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the
interest factor.
1. In a future value of 1 table:
a.
b.
J
C.
a.
b.
Annual
Rate
C.
10%
8%
10%
Annual
Rate
9%
11%
Number of Years
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12%
2. In a present value of an annuity of 1 table: (Round answers to 1 decimal place, e.g. 458,58.1.)
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29
16
10
7
7
20
29
32
Compounded
28
Annually
Quarterly
Semiannually
Frequency of
Rents
Annually
Semiannually
(a) Rate of Interest
Quarterly
(a) Rate of Interest
%
%
%
%
%
%
(b) Number of Periods
(b) Number of Periods
Calculate the present value of the following annuities, assuming each annuity payment is made at the end of each compounding
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places.)
1.
2.
3.
Annuity
Payment
$ 5,600
10,600
4,600
Annual
Rate
Interest
Compounded
Semiannually
9.0%
10.0% Quarterly
11.0%
Annually
Period
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3 years
2 years
5 years
Present Value of
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Calculate the future value of the following annuities, assuming each annuity payment is made at the end
of each compounding period. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s)
from the tables provided. Round your answers to 2 decimal places.)
1.
2.
3.
Annuity Annual
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$4,700 6.0 %
8.0 %
7,700
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Show Transcribed Text
1.
2.
3.
Annuity Annual
Payment
Rate
Interest
Compounded
Quarterly
Annually
Semiannually
$ 5,700
Interest
Compounded
8.0 % Quarterly
10,700 11.0%
Annually
4,700 10.0 % Semiannually
Period
Invested
5 years
6 years
9 years
Calculate the present value of the following annuities, assuming each annuity payment is made at the end
of each compounding period. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s)
from the tables provided. Round your answers to 2 decimal places.)
$
Period
Invested
2 years
5 years
3 years
Future Value of
Annuity
172,892.28
Present Value of
Annuity
Chapter 7 Solutions
Intermediate Accounting
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Ch. 7 - Prob. 7.3BECh. 7 - Prob. 7.4BECh. 7 - Prob. 7.5BECh. 7 - Present Value of a Single Sum, Compound Interest....Ch. 7 - Future Value of a Single Sum, Compound Interest....Ch. 7 - Prob. 7.8BECh. 7 - Present Value of a Single Sum, Compounded Interest...Ch. 7 - Prob. 7.10BECh. 7 - Present Value of a Single Sum, Calculating Time...Ch. 7 - Future Value of an Ordinary Annuity. An...Ch. 7 - Future Value of an Annuity Due. Mariah Carey...Ch. 7 - Future Value of an Ordinary Annuity: Calculating...Ch. 7 - Present Value of an Ordinary Annuity. CB...Ch. 7 - Present Value of an Annuity Due, Semiannual...Ch. 7 - Prob. 7.17BECh. 7 - Ordinary Annuity, Annuity Due, Using Interest...Ch. 7 - Prob. 7.2ECh. 7 - Prob. 7.3ECh. 7 - Prob. 7.4ECh. 7 - Prob. 7.5ECh. 7 - Prob. 7.6ECh. 7 - Prob. 7.7ECh. 7 - Future Value of an Ordinary Annuity, Future Value...Ch. 7 - Single Sum, Solving for Other Variables. Two...Ch. 7 - Ordinary Annuity, Solve for Interest Rate,...Ch. 7 - Present Value, Note Payable Prices. Wiz Khalifa...Ch. 7 - Future Value of a Deterred Annuity. Lenny Shafer...Ch. 7 - Prob. 7.13ECh. 7 - Present Value of an Ordinary Annuity, Present...Ch. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Future Value of an Annuity Due, Decision Making....Ch. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Prob. 7.21ECh. 7 - Prob. 7.22ECh. 7 - Prob. 7.1PCh. 7 - Present Value, Present Value of an Ordinary...Ch. 7 - Present Value, Present Value of an Annuity Due,...Ch. 7 - Prob. 7.4PCh. 7 - Prob. 7.5PCh. 7 - Prob. 7.6PCh. 7 - Prob. 7.7PCh. 7 - Present Value of an Annuity Due, Deferred...Ch. 7 - Present Value of an Ordinary Annuity, Present...Ch. 7 - Future Value of an Ordinary Annuity, Deferred...Ch. 7 - Present Value, Present Value of an Ordinary...Ch. 7 - Prob. 7.12PCh. 7 - Prob. 7.13PCh. 7 - Prob. 7.14PCh. 7 - Prob. 7.15P
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