Question
Compute the Future Value of a 5 -year ordinary annuity (where payments are received at the end of a time period), if the yearly annuity
Compute the Future Value of a 5 -year ordinary annuity (where payments are received at the end of a time period), if the yearly annuity is $10,000 and the relevant interest rate is 6%. Complete the following table, showing the Future Value Factors and the Future Value of each Annuity Payment for years 2 through 5. In addition, calculate the Future Value of this ordinary annuity using the proper Excel function. Copy and the paste the Excel function showing the parameters used to calculate the Future Value of the Annuity. Also compute the Future Value of an Annuity Due using the same parameters.
| Annual Interest Rate = | 6% | ||
| Year | Ordinary Annuity | Future Value Factor | Future Value of Annuity Payment |
| 1 | $10,000 | 1.26247696 | $12,624.77 |
| 2 | $10,000 | ||
| 3 | $10,000 | ||
| 4 | $10,000 | ||
| 5 | $10,000 | ||
Future Value of Ordinary Annuity = _____________________
Future Value of Annuity Due = _____________________
Excel Formula/Function:
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Elements Of Structured Finance
Authors: Ann Rutledge, Sylvain Raynes
1st Edition
0195179986, 978-0195179989
