Exercise 6-1

For each of the following cases, indicate (a) to what rate columns, and (b) to what number of periods you would refer in looking up the interest factor.

1. In a future value of 1 table:

Annual Rate

Number of Years Invested

Compounded

(a) Rate of Interest

(b) Number of Periods

a.12%10Annually

%

b.12%6Quarterly

%

c.8%16Semiannually

%

2. In a present value of an annuity of 1 table:

Annual Rate

Number of Years Invested

Number of Rents Involved

Frequency of Rents

(a) Rate of Interest

(b) Number of Periods

a.11%2626Annually

%

b.8%1428Semiannually

%

c.12%728Quarterly

%