Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Annulty payments are assumed to come at the end of each payment period (termed an ordinary annulty). However, an exception occurs when the annuty payments

image text in transcribed
Annulty payments are assumed to come at the end of each payment period (termed an ordinary annulty). However, an exception occurs when the annuty payments come at the beginning of each period (termed an annuity due). What is the future value of a 17 -year annulty of $2.500 per period where payments come at the beginning of each period? The interest rate is 7 percent Use Appendix C for an approximate answer, but calculate your final answer using the formula and financial calculator methods. To find the future value of an annuity due when using the Appendix tables, add 1 to n and subtract 1 from the tabular value For example, to find the future value of a $100 payment at the beginning of each period for five periods at 10 percent, go to Appendis. C for n=6 and i=10 percent. Look up the value of 7.716 and subtract 1 from it for an answer of 6.716 or $671.60 (\$100 6.716) Note: Do not round intermediate calculations. Round your final answer to 2 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance And Investments

Authors: Keith Redhead

1st Edition

0415428629, 978-0415428620

More Books

Students also viewed these Finance questions

Question

=+What is the local economic

Answered: 1 week ago