1. Exploring Finance: Future Value of an ordinary Annuity Future Value of an Ordinary Annuity Conceptual Overview: Explore how interest, payment, and number of periods determine the future value of an ordinary annuity. The upper (red) line depicts the future value of the ordinary annuity for the specified time period. The lower (blue) fine depicts the cumulative annuity payments over that time period. Use the sliders to change the interest rate, the payment per period, or the number of periods and observe how the future value of the annuity changes. FVAy = PMT [47]}"=4] = $100/(1+0.050) - 1) = $315.25 Future Value of Annuity 500 400 $300.60 $315 300 200 100 0 2 3 Period Int = 5 10 PMT = 100 200 400 N = 3 5 10 15 Created by Gary H. McClelland, Professor Emeritus University of Colorado Boulder Cengage Learning. All Rights Reserved 1. What is the approximate future value of an annuity after 10 years with payments each period of $200, and an interest rate of 6%? a. $1,257.59 b. $2,515.58 C. $2,636.16 d. $3,187.48 -Select- 2. Set the sliders so that the interest rate is 5%, the payment is $100, and the number of periods is 3. If the interest rate doubles from 5% to 10%, the future value of the annuity: a. Increases but by less than double b. Exactly doubles c. Increases by more than double d. Cannot be determined -Select- $100, and the number of periods is 3. If the payment doubles from $100 to 5200, the future value of the 3. Again, set the sliders so that the interest rate is 5%, the payment annuity: a. Increases but by less than double b. Exactly doubles c. Increases by more than double d. Cannot be determined -Select- 5%, the payment is $100, and the number of periods is 3. If the number of periods doubles from 3 to 6, the future value of the 4. Again, set the sliders so that the interest rate annuity: a. Increases but by less than double b. Exactly doubles C. Increases by more than double d. Cannot be determined -Select