Question

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:

		Annual Rate		Number of Years Invested		Compounded		(a) Rate of Interest			(b) Number of Periods
a.		12%		10		Annually		enter percentages	%		enter the number of periods
b.		12%		6		Quarterly		enter percentages	%		enter the number of periods
c.		8%		16		Semiannually		enter percentages	%		enter the number of periods

2. In a present value of an annuity of 1 table: (Round answers to 1 decimal place, e.g. 458,58.1.)

		Annual Rate		Number of Years Invested		Number of Rents Involved		Frequency of Rents		(a) Rate of Interest			(b) Number of Periods
a.		11%		26		26		Annually		enter percentages	%		enter the number of periods
b.		9%		14		28		Semiannually		enter percentages	%		enter the number of periods
c.		12%		7		28		Quarterly		enter percentages	%		enter the number of periods

Answer 1

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:

		Annual Rate		Number of Years Invested		Compounded		(a) Rate of Interest			(b) Number of Periods
a.		12%		10		Annually		12%			10
b.		12%		6		Quarterly		12/4 = 3%			6*4 = 24
c.		8%		16		Semiannually		8/2 = 4%			16*2 = 32

2. In a present value of an annuity of 1 table: (Round answers to 1 decimal place, e.g. 458,58.1.)

		Annual Rate		Number of Years Invested		Number of Rents Involved		Frequency of Rents		(a) Rate of Interest			(b) Number of Periods
a.		11%		26		26		Annually		11%			26
b.		9%		14		28		Semiannually		9/2 = 4.5%			28
c.		12%		7		28		Quarterly		12/4 = 3%			28