E9-3

Christy Reed made a $3,200 deposit in her savings account on her 21st birthday, and she has made another $3,200 deposit on every birthday since then. Her account earns 8 percent compounded annually.

How much will she have in the account after she makes the deposit on her 32nd birthday? UseAppendix Cfor an approximate answer, but calculate your final answer using the formula and financial calculator methods.(Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Future Value=

E9-5

Annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exception occurs when the annuity payments come at the beginning of each period (termed an annuity due).

What is the future value of a 10-year annuity of $10,000 per period where payments come at the beginning of each period? The interest rate is 8 percent. UseAppendix Cfor 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 tonand 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 Appendix C forn= 6 andi= 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).(Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Future Value =