Find the future values of the following ordinary annuities:

1. FV of $600 paid each 6 months for 5 years at a nominal rate of 4% compounded semiannually. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

2. FV of $300 paid each 3 months for 5 years at a nominal rate of 4% compounded quarterly. Do not round intermediate calculations. Round your answer to the nearest cent.

   $

3. These annuities receive the same amount of cash during the 5-year period and earn interest at the same nominal rate, yet the annuity in part b ends up larger than the one in part a. Why does this occur?

The options are: the nominal deposits into the annuity in part (b) are greater than the nominal deposits into the annuity in part (a).

The annuity in part (a) is compounded less frequently; therefore, more interest is earned on previously-earned interest.

The annuity in part (a) is compounded more frequently; therefore, more interest is earned in previously-earned interest.

The annuity in part (b) is compounded less frequently; therefore, more interest is earned in previously-earned interest.

The annuity in part (b) is compounded more frequently; therefore, more interest is earned in previously-earned interest.