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.9% 10 Annually

b.12% 7 Quarterly

c.10% 18 Semiannually

(a) Rate of Interest (b) Number of Periods

a) a)

b) b)

c) c)

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

Annual Rate Number of Years Invested Number of Rents Involved

a) 10% 27 27

b) 8% 15 30

c) 8% 7 28

Frequency of Rents (a) Rate of Interest (b) Number of Periods

a) Annually a) _________% _______________

b) Semiannually b) _________% _______________

c) Quarterly c) _________% ________________