Question

1. Find the amount to which $350 will grow under each of the following conditions. Do...

1. Find the amount to which $350 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent.

1a. 6% compounded annually for 5 years.

1b. 6% compounded semiannually for 5 years.

1c. 6% compounded quarterly for 5 years.

1d. 6% compounded monthly for 5 years.


2. Find the present value of the following ordinary annuities. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used in many situations, to see how changes in input variables affect the output variable. Also, note that you can leave values in the TVM register, switch to Begin Mode, press PV, and find the PV of the annuity due.) Do not round intermediate calculations. Round your answers to the nearest cent.

2a. $200 per year for 10 years at 14%.

2b. $100 per year for 5 years at 7%.

2c. $200 per year for 5 years at 0%.

2d. Now rework parts a, b, and c assuming that payments are made at the beginning of each year; that is, they are annuities due.

What is present value of $200 per year for 10 years at 14%?

What is present value of $100 per year for 5 years at 7%?

What is present value of $200 per year for 5 years at 0%?

Homework Answers

Answer #1

A = P [ 1 + r / n ] ^ n.t

where A = Total amount

P = Principal amount

r = annual interest rate

n = number of times compounded per year

t = time in years

Answer 1 a )  6% compounded annually for 5 years

P= $350 , r = 6% , n= 1 , t =5

A = 350 [ 1 + 0.06 / 1 ] ^ 1.5

A = 350 . 1.06 ^ 5

A = 350 . 1.338226

A = 468.38

Answer 1b. ) 6% compounded semiannually for 5 years.

P= $350 , r = 6% , n= 2 , t =5

A = 350 [ 1 + 0.06 / 2 ] ^ 2.5

A = 350 . 1.03 ^ 10

A = 350 . 1.343916

A = 470.37

Answer 1c ) 6% compounded quarterly for 5 years.

P= $350 , r = 6% , n= 4 , t =5

A = 350 [ 1 + 0.06 / 4 ] ^ 4.5

A = 350 . 1.015 ^ 20

A = 350 . 1.346855

A = 471.40

Answer 1 d ) 6% compounded monthly for 5 years.

P= $350 , r = 6% , n= 12 , t =5

A = 350 [ 1 + 0.06 / 12 ] ^ 12.5

A = 350 . 1.005 ^ 60

A = 350 . 1.34855

A = 472.10

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
4. Find the future value of the following annuities. The first payment in these annuities is...
4. Find the future value of the following annuities. The first payment in these annuities is made at the end of Year 1, so they are ordinary annuities. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for...
Present Value of an Annuity Find the present value of the following ordinary annuities. Round your...
Present Value of an Annuity Find the present value of the following ordinary annuities. Round your answers to the nearest cent. (Notes: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second...
Present and Future Values of Single Cash Flows for Different Interest Rates Use both the TVM...
Present and Future Values of Single Cash Flows for Different Interest Rates Use both the TVM equations and a financial calculator to find the following values. (Hint: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown...
3. Use both the TVM equations and a financial calculator to find the following values. (Hint:...
3. Use both the TVM equations and a financial calculator to find the following values. (Hint: If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure can be used...
Use both the TVM equations and a financial calculator to find the following values. Round your...
Use both the TVM equations and a financial calculator to find the following values. Round your answers to the nearest cent. (Hint: Using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can "override" the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the second answer. This procedure...
Find the amount to which $600 will grow under each of the following conditions. Do not...
Find the amount to which $600 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent. 6% compounded annually for 5 years. $   6% compounded semiannually for 5 years. $   6% compounded quarterly for 5 years. $   6% compounded monthly for 5 years. $  
To the closest year, how long will it take $200 to double if it is deposited...
To the closest year, how long will it take $200 to double if it is deposited and earns the following rates? [Notes: (1) If you are using a financial calculator, you can enter the known values and then press the appropriate key to find the unknown variable. Then, without clearing the TVM register, you can “override” the variable that changes by simply entering a new value for it and then pressing the key for the unknown variable to obtain the...
eBook Find the amount to which $200 will grow under each of these conditions: 6% compounded...
eBook Find the amount to which $200 will grow under each of these conditions: 6% compounded annually for 8 years. Do not round intermediate calculations. Round your answer to the nearest cent. $   6% compounded semiannually for 8 years. Do not round intermediate calculations. Round your answer to the nearest cent. $   6% compounded quarterly for 8 years. Do not round intermediate calculations. Round your answer to the nearest cent. $   6% compounded monthly for 8 years. Do not round...
Find the amount to which $400 will grow under each of the following conditions. Do not...
Find the amount to which $400 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent. 12% compounded annually for 5 years. $   12% compounded semiannually for 5 years. $   12% compounded quarterly for 5 years. $   12% compounded monthly for 5 years. $  
Find the amount to which $800 will grow under each of these conditions: 5% compounded annually...
Find the amount to which $800 will grow under each of these conditions: 5% compounded annually for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent. $   5% compounded semiannually for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent. $   5% compounded quarterly for 6 years. Do not round intermediate calculations. Round your answer to the nearest cent. $   5% compounded monthly for 6 years. Do not round intermediate...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT