Question

Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent. $500 per year for 12 years at 6%. $ $250 per year for 6 years at 3%. $ $800 per year for 2 years at 0%. $ Rework parts a, b, and c assuming they are annuities due. Future value of $500 per year for 12 years at 6%: $ Future value of $250 per year for 6 years at 3%: $ Future value of $800 per year for 2 years at 0%: $

Answer 1

Answer:

FV of ordinary annuity:

$500 per year for 12 years at 6%.  

FV = $500 x 16.870 (FV annuity factor, 6%, 12 periods) = $8,435

$250 per year for 6 years at 3%.  

FV = $250 x 6.4684 (FV annuity factor, 3%, 6 periods) = $1,617.10

$800 per year for 2 years at 0%.

FV = $800 x 2 (FV annuity factor, 6%, 12 periods) = $1,600

FV of annuity due:

$500 per year for 12 years at 6%.  

FV = $500 x 17.8821 (FV annuity due factor, 6%, 12 periods) = $8,941.05

$250 per year for 6 years at 3%.  

FV = $250 x 6.6625 (FV annuity due factor, 3%, 6 periods) = $1,665.63

$800 per year for 2 years at 0%.

FV = $800 x 2 (FV annuity due factor, 6%, 12 periods) = $1,600